Government to prune welfare expenditure to tackle fiscal deficit

The government is to implement a stringent fiscal measure of pruning welfare expenditure for the needy population owing to rising cost of public sector pensions and salary payments while cutting down unnecessary spending of state institutions, Finance Ministry sources said.

This directive was issued recently by Finance Minister Basil Rajapaksa at a recent meeting with Ministers and secretaries in Colombo, the sources said.

However the Minister has issued instructions to senior officials to take every possible step to maintain welfare facilities for the poorest of the poor and enforce the cuts where overhead expenses are concerned.

Although it is difficult to curtail recurrent expenditure needed to pay public sector salaries and pensions as well as to provide a fiscal stimulus and other financial assistance for COVID-19 affected persons, the Ministry has directed the relevant ministries and institutions to streamline welfare programmes with constant monitoring to reduce expenditure.

The expenditure on salaries and wages of public servants including Provincial Councils increased by 8 percent to Rs. 274 billion in the first four months of 2021, compared to Rs. 253.8 billion in the same period of 2020, Finance Ministry statistics showed.

The pension payment increased by 9.3 percent to Rs. 87.3 billion in the first four months of 2021, compared to Rs. 79.9 billion in the same period of 2020, the data revealed.

This increase was mainly attributable to the higher basic salaries of new pensioners together with the payment of overdue gratuity in the first four months of 2021, a senior Treasury official said.

The Government has incurred a sum of Rs. 172.1billion on household subsidies including Samurdhi payments, elder’s allowance, assistance to differently-abled soldiers, food package for pregnant mothers, and fertiliser subsidy and school uniforms and text books in the first four months of 2021.

Expenditure on Samurdhi cash grant provided to low- income families remained intact at Rs. 17,271 million in the first four months of 2021.

However, financial support provided for kidney patients with a payment of Rs. 5,000 per month increased by 40 percent to Rs. 776 million from Rs. 554 million due to the increase in beneficiaries e f f e c t ive from September 2020 with the inclusion of all low income kidney patients in the country as per the Cabinet decision dated

The cost of welfare programmes on education such as free textbooks, uniforms and shoes for students in difficult school for the concerned period was Rs. 2,888 million (in the 4 months under review

10.06.2020, the Ministry data showed.

The Government expenditure on medical supplies for state hospitals rose by 46 percent to Rs. 20,143 million in the first four months of the year 2021 compared to Rs. 13,763 million in the same period of 2020 due to additional expenditure on prevention of the COVID-19 pandemic.

A sum of around Rs. 2,000 million was spent on the nutritional food package programme for expectant mothers.

The cost of welfare programmes on education such as free textbooks, uniforms and shoes for students in difficult school for the concerned period was Rs. 2,888 million (in the 4 months under review).