No option other than printing money: Sri Lanka


The Sri Lankan Minister of Finance and Deputy Minister of Planning, Sarath Amunugama said there is no option other than printing money or taking loans to bridge the budget deficit. Amunugama said this when he declared open a People’s Bank Service Centre in the premises of District Secretariat, Kandy, recently. He further said though Sri Lanka needs Rs 1,700 billion as annual overhaul expenditure,  income is only Rs 1,200 billion. “The deficit is a gigantic Rs 500 billion. To fill this gap we have no option other than printing money or lending loans from foreign countries. We are faced with a major challenge to fill this gap. If we print money it will create inflation in the economy. It will have a major impact on poor people. Every government tries to lower inflation. In my view without increasing the salary of government servants, you should try to lower inflation. Under the President’s Financial Management, inflation which was 20% has been lowered to 7%. Our aim is to bring inflation down to 5.2% by 2013. “Although everyone laments the cost of living has gone up, we have subjected the prices of all items produced in our country to fixed control. The prices of items we import are going up daily, without control. The State banks in our country helps us to control loans from foreign countries. As the Chairman of Public Accounts Committee, I see money is given to ministries and other state institutions which do not use the money they are given through the Budget proposals. About 15% of that money is sent back at the end of the year. But they charge money has not been allocated to them in the budget. That is why government servants should work more responsibly,” Amunugama said.]]>


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