2024 Budget: What are the proposals?

By: Staff Writer

Colombo (LNW): President Ranil Wickremesinghe presented the finalised 2024 Budget Appropriation Bill a short while ago. Within this fiscal framework, President Wickremesinghe articulated a strategic approach to salary increases for public servants, emphasising the necessity of bolstering the government’s income before considering such increments. He underscored the gravity of the matter, asserting that salary adjustments must be undertaken judiciously and responsibly.

President Wickremesinghe elucidated on potential avenues for increasing public servant salaries, stipulating that such increments should be financed through prudent measures such as ‘money printing,’ tax adjustments, new taxation, or borrowing from external sources.

Notably, he emphasised that 35 per cent of tax revenue would be earmarked to cover the costs associated with raising the salaries of government employees.

Reflecting on the economic trajectory of Sri Lanka, President Wickremesinghe acknowledged the challenges encountered in the past year and emphasised the concerted efforts required to navigate the nation back onto a sustainable path. He lamented instances where certain forces attempted to impede the collective progress achieved through the hard work of the citizenry.

The budget for the upcoming year proposes a substantial increase in the living expenses allowance for government employees, amounting to Rs. 10,000. This adjustment will bring the total allowance to Rs. 17,800, addressing the longstanding absence of salary increases for government employees since 2015.

President Wickremesinghe asserted his commitment to providing relief to government employees without disrupting the delicate balance of the state budget.

Acknowledging the significant demographic impact, with approximately 1.3 million government employees and over 5 million family members, the budget proposes a 10,000-rupee increase in the living expenses allowance, culminating in a total of Rs. 17,800.

President Wickremesinghe assured a phased implementation, with the allowance incorporated into monthly salaries from April onward, and arrears for January to March disbursed in six-month instalments commencing October.

Additionally, the budget outlines plans to increase the living allowance for pensioners by Rs. 2,500, affecting 730,000 government pensioners. The monthly living allowance for this demographic will rise from Rs. 3,525 to Rs. 6,025, effective from April 2024.

President Wickremesinghe also proposed an 8 per cent increase in the deduction from salaries for contributions to the pension of widows and orphans.

Addressing housing concerns, President Wickremesinghe announced the cessation of rent charges for low-income families in Colombo’s urban housing, with full ownership granted to eligible families.

In 2024, approximately 50,000 families in Colombo will receive home ownership, contributing to the broader objective of making 70 per cent of the country’s population land and home owners.

The budget allocates funds for various infrastructure projects, including Rs. 10 billion for public facility improvements in highlands, Rs. 4 billion for housing construction for the plantation community, and Rs. 2 billion for the maintenance of bridges and roads damaged by natural disasters.

To address economic challenges, President Wickremesinghe highlighted an additional allocation of Rs. 55 billion to restart projects stalled due to the economic crisis. He earmarked Rs. 600 million for the ‘Bimsaviya’ programme, signalling a comprehensive education reform.

The budget includes provisions for establishing four new universities, with the goal of doubling or tripling the number of universities in the next two or three years.

President Wickremesinghe emphasised the development of state universities to align with the demands of the new era, beginning with the University of Peradeniya. He allocated Rs. 500 million for this initiative and expressed openness to the establishment of non-government universities, subject to robust regulatory frameworks.

The budget introduces a loan system through commercial banks, allowing repayment after securing employment, in addition to the existing interest-free student loan system. A National Higher Education Commission will be established, endowed with decision-making and regulatory powers.

President Wickremesinghe reiterated the importance of creating opportunities for employment, both domestically and internationally, for young individuals without university education. To support this objective, he allocated Rs. 150 million to the Sri Lanka Foundation for training courses.

Furthermore, the budget allocates Rs. 500 million to enhance English language literacy, underscoring the government’s commitment to educational development.