An order to Sri Lankan government institutions regarding arrears of salaries, and essential services
Sri Lanka’s state spending unit have been ordered by the Finance Ministry to strictly comply with spending restrictions and prioritize settling arrears and maintaining essential service, before starting new activities.
“Public expenditure in the year 2023 should be incurred more prudently that ever before, due to the current economic crisis,” a Treasury circular to ministries, departments and state corporations said.
Spending agencies should the direct funds to maintain essential services. Attention should then be paid to completing nearly complete work, take action to ensure public safety in the case of partially done projects before starting any new commitments.
Sri Lanka has raised taxes in 2022 to reduce borrowings and halt money printing which triggers forex shortages.
“Overdue bills pertaining to the year 2022, if any, should be settled prior to entering into new commitments in the year 2023.”
Though allocations have been made, the availability of funds should be checked to prevent difficulties to contractors and service providers.
Concurrence of the Department of Treasury Operations should be obtained before entering into new capital projects of over 500 million rupees for 2023 and projects over 1,000 million even if they are to be paid in multiple years.
And the circular warned that the relevant officers will be personally responsible for such expenditure,”
