Impact of Appropriation (Amendment) Bill to amend

0
38

The inauguration speech of the second reading of the Appropriation (Amendment) Bill, to amend the Appropriation Act No. 30 of 2021, is scheduled for 30 August

The debate on the second reading of the Appropriation (Amendment) Bill will be held on 31 August, 1 and 2 September. The Bill is scheduled to be passed after the committee stage and the third reading on 2 September.

The Appropriation Bill presented by the former Minister Basil Rajapaksa, who was the Minister of Finance at the time, was passed in Parliament following a debate held on the Bill presented for the purpose of providing necessary service expenses and arrangements for the fiscal year 2022.

Accordingly, the Appropriation Bill was endorsed and certified as an Act on 10 December 2021 and was herein called the Appropriation Act No. 30 of 2021. After Ranil Wickremesinghe assumed the office of the President, Parliament prorogued on 28 July 2022 and the Third Session of the Ninth Parliament was declared open on 3 August. The incumbent President, while presenting his government’s policy statement, stated that he will present a new budget.

As a result, this Appropriation Bill for the remainder of the 2022 fiscal year as a new government is presented to Parliament as an amendment to the previously presented Appropriation Bill. Prime Minister Dinesh Gunawardena, on behalf of the Minister of Finance, presented the Appropriation (Amendment) Bill to amend the Appropriation Act No. 30 of 2021 to Parliament for the first reading on 9 August.

According to the said Act, referred to in Sub-section (1) of Section 2 of the Appropriation Act No. 30 of 2021, Instead of the words “rupees two thousand seven hundred ninety-six billion four hundred forty-six million five hundred fifty-eight thousand” (Rs. 2,796, 446,558,000), the words “rupees three thousand two hundred seventy-five billion eight hundred seventy-six million five hundred fifty-eight thousand” (Rs.3,275,876,558,000) have been substituted.

Impact of the Amendment

According to the previously presented Appropriation Bill, an amount of Rs. 2,796.4 billion was estimated for the 2022 fiscal year from 1 January 2022 to 31 December 2022. According to the new amendment, for the year 2022, the amount allocated to bear the Ministerial Service Expenses of the Government, the estimated amount has increased to Rs. 3,275.8 billion and accordingly the expenditure required for the Ministerial Service activities has increased by Rs. 929.4 billion by the substitution in paragraph (b) of that Sub-section, for the words “shall not exceed rupees three thousand two hundred billion” (Rs. 3,200 billion), of the words “shall not exceed rupees four thousand eighty-two billion” (Rs. 4,082 billion). For the financial year 2022, the credit amount obtained from within or outside of Sri Lanka will be increased from Rs. 3,200 billion to Rs. 4,082 billion. Accordingly, subject to the approval of the Parliament, the borrowing limit of the Government is increased by about Rs. 892 billion.

In Section 2 Sub-section 4 of Appropriation Act No. 30 of 2021, the words “rupees two thousand six hundred twenty-three billion one hundred twenty-three million four hundred forty-two thousand” (Rs. 2,623 billion), has been substituted by the words “rupees two thousand nine hundred one billion one hundred twenty-three million four hundred forty- two thousand” (Rs. 2,901 million).

With the amendment of this Sub-section 4, the estimated expenditure of the government’s has been given the space to be increased from Rs 2,623 billion to Rs. 2,901.

After the Section 9 of the main charter, a new Section as 9(a) is inserted by the new amendment to the Appropriation Act No. 30 of 2021. Given that the money under the Appropriation Act No. 30 of 2021 approved earlier for the fiscal year 2021 has not been spent for the programmes specified under the specific headlines of the respective ministries, such money is also authorized to be spent further under this amendment.

Accordingly, the estimated amount for the 2022 fiscal year presented under Appropriation Act No. 30 of 2021 is also revised for special expenditure units (expenditure for the offices of the Commission including the President) and the amount allocated to Ministries.

Allocation of funds to Ministries for the Fiscal Year 2022

According to the approved Appropriation Act No. 30 of 2021 and the Appropriation (Amendment) Bill submitted thereto, the allocation of Ministries will be changed. In the Appropriation Act presented by the Minister of Finance on 7 October, 2021, pertaining to the fiscal year 2022, there were 32 Ministries and 43 State Ministries in addition to the special spending units.

Accordingly, in the Appropriation Bill dated 7 October, 2021, Rs. 2,505 billion had been allocated. After debating the Appropriation Bill, it was endorsed and certified as the Appropriation Act No. 30 of 2021 on 10 December 2021. According to the Act, the amount allocated to the Ministries varies as Rs. 2,796 billion. According to the Appropriation (Amendment) Bill No. 30 of 2021, which will be presented for the coming months of the fiscal year 2022, 3,276 billion rupees have been allocated for Ministry service expenses. The specialty is that this amount is allocated for 29 Ministries (excluding special expenditure units). However, this is shown as a sum of all the money previously allocated to the Ministries and the money that has not been spent.  Therefore, according to the existing Appropriation Act, the new Appropriation Act will change the service cost by Rs. 480 billion.

BY Research Division, Parliament of Sri Lanka