Cost of subsidies risen to Rs. 76 billion | Daily News

Cost of subsidies risen to Rs. 76 billion

Government spending on subsidies granted to the people in the form of Samurdhi, fertiliser, school textbooks, school uniforms and other items which cost Rs.354 billion in 2015 had today increased by Rs.76 billion to a total of Rs.430 billion a high Treasury official said.

“This increase of Rs. 76 billion for granting subsides to the people is a significant feature on the part of the government,” the official said.

The Yahapalana Government which assumed office on January 8, 2015 has taken measures to gradually increase spending on subsidies to the people including school textbooks, and uniforms, nutrition programmes, allowances to disabled War Heroes, fertiliser, Samurdhi, free medicine and persons.

Government total spending this year (2018) is estimated at Rs.2,903 billion of this Rs.820 billion had been allocated for debt repayment and servicing. Another Rs.630 billion is earmarked for salaries and wages. Rs.751 billion is earmarked for capital expenditure. Goods and services are estimated to cost Rs.195 billion.

The official said the increase in the Samurdhi allowance by 200 percent and increase of the fertiliser subsidy, and welfare measures in the education and health sectors had directly resulted in the increase on welfare spending.

During the previous Rajapaksa regime, the government’s spending on subsides to the people was Rs.205 billion in 2012, Rs. 223 billion in 2013 and Rs.250 billion in 2014. “This rapid increase in welfare spending should engage the special attention of the public, government,” sources said.

Meanwhile, the government will stand to lose Rs. 1,200 million in income due to the vat exemption granted to the health sector,” Deputy Treasury Secretary S.R. Attygalle said.

All private sector health services except room charges have been exempted from VAT with effect from July 1. This has accounted for the loss of a sizeable amount of government income.

Attygalle said the new Inland Revenue Act was implemented from April 1 this year and the government estimated an income of Rs.30 billion from it during the first two months of its implementation and the government had realised an increased income of Rs.5 billion. 


 

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