Govt, the governor of the Central Bank and the Finance Minister had been boasting all the time that the Sri Lankan economy was strong enough...!!!

Govt. borrowed Rs. 38,188 million from Bank of Ceylon
by Saman Indrajith


The government had obtained a Rs. 38,188 million overdraft from the Treasury account maintained at the Bank of Ceylon's Taprobrane Branch in Colombo as at January 30, this year, Parliament was told yesterday.

This was an increase of Rs. 35,300 million from Rs. 2,888 million of overdrafts as at December 31, 2008, Chief Government Whip, Urban Development and Sacred Area Development Minister Dinesh Gunawardena said.

The Minister was responding to a question raised by JVP MP Premasiri Manage.

Asked to state the reasons for the escalation of the over draft to such a high amount, the Minister said it was due to shortfall of revenue from taxes and levies on foreign trade and domestic taxes, as a result of decrease in imports value-wise and volume wise after the world economic recession started in the last quarter of 2008, and the inability of curtailing recurrent expenditure correspondingly to the decrease in revenue and non availability of commercial borrowing from foreign sources.

Asked what measures had been taken so far to prevent the escalation of the overdraft, Minister Gunawardena said that one was the introduction of effective strategies and methodologies for speedy collection of taxes and levies imposed Parliament, other than recurrent and capital expenditure of an urgent and essential nature and following the procurement best practices for incurring capital expenditure in order to ease cash flow issues.

It is expected to explore the possibility of borrowing through foreign sources after recovery from the global economic recession, he said.

MP Manage said that the Government, the governor of the Central Bank and the Finance Minister had been boasting all the time that the Sri Lankan economy was strong enough not to suffer or be affected by the global economic crisis, but now there was clear evidence which proved that the truth was otherwise.

Minister Gunawardena said that there was a global economic crisis and noted that various measures were being taken to reduce the overdraft and remedy the situation.

www island.lk