By:Staff WriterColombo (LNW): Government treasury cash flow management has ensured the availability of adequate funds to operationalise government fiscal policy during the first quarter 2023 through implementing agencies efficiently and effectively, finance ministry sources confirmed.
The finance ministry’s total receipts to the treasury in the form of revenue and other sources amounted to Rs. 650 billion in the first quarter 2023 with the tax revenue realization of Rs 578 billion, an increase of 56 percent from Rs 370 billion in the same period last year.
The increase came partly from tax hikes and stringent expenditure controls in accordance with spending-based fiscal consolidation agreed upon with the International Monetary Fund (IMF), a senior official of the ministry disclosed.
The expenditure was Rs .602 billion even amidst finance ministry’s strict guidelines to control capital spending and curtailment of cash outflow for both recurrent expenses and public investment, he pointed out.
Sri Lanka has recorded a primary budget surplus of Rs 48 billion in the first quarter of 2023, treasury’s fiscal department data indicated.
However the government is in urgent need of tackling Treasury cash flow issues as its monthly collection of Rs. 141 billion in tax revenue is insufficient to pay Rs. 88 billion for salaries, Rs. 30 billion for pension and Samurdhi welfare, Rs. 6.5 billion for fertilizer, Rs. 8.7 billion for medicine, and Rs. 154 billion for other administration costs including transport.
Treasury cash flow management process transforms the Annual Budget approved by Parliament for a particular financial year into an implementable cash flow.
The fund flows include cash inflows in the form of revenue and borrowings and cash outflows in the form of expenditure, which comprise of both recurrent and capital payments including debt service payments.
The total receipts to the Treasury cash flow in the form of revenue and other sources amounted to Rs. 1,876.8 billion in 2022 with the realization of 78 percent from the revenue estimate of Rs. 2,383.7 billion in 2021.
Meanwhile, the cash outflow for both recurrent expenses and public investment in 2022 amounted to Rs. 4,233.4 billion including interest payment of Rs. 1,366.2 billion and excluding debt repayment as against the estimate of Rs. 4,741.5 billion representing 89.0 percent from the estimate in 2021 .
The net borrowings amounted to Rs. 2,961.3 billion in 2022 which was used to finance the net cash deficit, mainly the interest payments. In addition, part of the bank overdraft was also settled during the year in 2022, finance ministry report highlighted.