By Ashwin Hemmathagama
Our Lobby Correspondent
A resolution to raise Rs. 400 billion through the issuance of Treasury Bonds was shot down yesterday in Parliament with 52 lawmakers voting against it and 31 for it.
The outcome also exposes the dire status of public representation with only a mere 83 out of 225 legislators were present at the time of the vote.
Minister of Finance Ravi Karunanayake moved the resolution under the Local Treasury Bills Ordinance to gain approval for a sum not exceeding Rs.400 billion to be borrowed.
“There were seven Governments in power since independence. Until Mahinda Rajapaksa took over total borrowing was at Rs. 250 billion. He increased this significantly. By 2015 January there were no tenders called and the total debt stands at Rs.670 billion. We have shown progress during the past 82 days. We need to increase borrowing from Rs. 850 billion to Rs. 1,250 billion simply because the budget deficit of Rs. 520 billion. We have brought many benefits to Sri Lankans during the past few weeks. Yes, we know that you are concerned about being unable to make money from illegal activities. This money will be borrowed not to be spent lavishly but to shoulder the benefits given to the masses,” explained Minister Karunanayake who said financial mismanagement was five times greater than total borrowing during the Rajapaksa regime.
“This is a ploy to print money,” the opposition leader, Nimal Siripala, told the parliament before the vote. “This will increase the money circulation temporarily, but it’s not good for the economy.”
Opposition lawmaker Ajith Kumara said: “The new Government pledged to pass more authority to Parliament as part of its 100-day program. None of the consultative committees have met for a long time. The proposed issuance of Rs. 400 billion local bonds too should have been discussed first by the committee.”
MP Bandula Gunawardena stated: “According to Article 148 of Constitution, Parliament holds responsibility for funds. This will exceed the total borrowing limit assigned to a Government. Since independence, we were limited to borrow Rs. 850 billion. But this issue will force us to print more money and to use wheelbarrows to carry money in the days to come.”
According to the Central Bank there has been a considerable increase in local borrowing by the Government since January 2015. It was also reported that Government spending has increased and its revenue has decreased due to Government employees’ pay hike and the slashing of essential items and fuel prices introduced through the Interim Budget.
Hence, while the Government is keen on issuing Treasury Bills and Bonds locally and raising loans to meet its expenditure, Treasury Bills and Bonds issued locally within the first three months of this year, rising to some Rs. 216 billion, has been a significant feature.
Meanwhile, the Government has raised a loan of nearly Rs. 70 billion during the first three months of this year through the issuance of Sri Lanka Development Bonds. Analysts point out that the Government’s monetary situation is under pressure since its plans to raise $1.5 billion through the issuance of international bonds has been delayed.