Govt. exceeds borrowing limits increasing per capita debts

The Vote on Account, passed in October last year, allows the government only to borrow up to LKR 720 billion during this period. However, Verite Research said that the government has borrowed up to LKR 841 billion between January and April last year.

In terms of the Fiscal Management (Responsibility) Act, No.3 of 2003 as amended by the Fiscal Management (Responsibility) (Amendment) Act, No.15 of 2013, the maximum value of liability as at the end of a particular year shall not exceed 80% of the estimated Gross Domestic Product.

According to financial statements of the government presented to audit, the said restrictions had been complied with.

However, in auditing the financial statements of the year 2019, taking into consideration the liabilities of LKR 1,035 billion as foreign borrowings, treasury bonds and liabilities relating to various public enterprises which had been accounted outside the statement of financial position.

The Central Bank advances and bank overdrafts, the total liability of the Government had been LKR 13,493 billion audit inspection revealed.

It had represented 86.49% of the Gross Domestic Product of the year 2019. As such, the maximum restriction of liabilities cited in the Fiscal Management (Responsibility) Act had been exceeded.

In comparison to the total public debt with the mid year population, the per capita debt was LKR 264,824 as at 31 December 2012 and it had increased up to LKR 558,999 by 31 December 2019.

Moreover, as compared with the per capita debt of LKR 520,364 as at 31 December 2018, it had increased by LKR 38,635 representing 7.42%.

Meanwhile, the per capita debt was LKR 264,824 as at 31 December 2012 and it had increased up to LKR 558,999 by 31 December 2019 in comparison to the total public debt with the mid-year population.