Treasury orders state institutions to reduce utility bills, foreign trips curtailed
The Treasury has issued strict directives to all state institutions to cut down expenses, as a cash-strapped government struggles to revive the economy in the aftermath of the Easter Sunday attacks.
The state institutions have been told to cut down expenses on water, electricity and telephone bills, curtail overseas training and not to use public funds to print diaries and calendars for next year.
In a circular, Treasury Secretary R.H.S. Samaratunga has instructed state institution heads to pay personal attention towards minimising waste and economical usage of funds of expenditure for their agencies. This was because of “adverse pressure prevailing on the government revenue due to impediments caused to the economic activities through unexpected incidents that occurred in April, 2019”- an apparent reference to the Easter Sunday attacks that shook the nation.
Accordingly, department heads have been told to look into instances of buying office needs through following up in-service utilisation and putting up proper expenditure controls in obtaining services under agreements. They have been told to cut down on other basic requirements such as electricity, water, telephone and fuel.
They have been strictly instructed that any payments should not be made in contravention of Public Administration regulations and Circulars.
“Actions should be taken to reduce recurrent expenditure by not incurring additional expenditure, deferment of expenses which can be deferred,” Dr Samarathunga said in the circular.
Under the key cost-cutting directives, state institutions have been requested to strictly adhere to regulations in paying overtime allowances, especially in calculating the number of hours as set out in Establishment Code and Circulars.
The circular also says that expenses for state-sponsored foreign educational tours of senior employees should be minimised or they should not be allowed to participate in such tours if it is not an official participation representing the country.
To save electricity bill payments by five percent, the Treasury has recommended that a proper mechanism should be followed and all unnecessary lights and fans should be switched off.The new measures come as all ministries have been instructed to identify fifteen percentage of their respective capital expenditure allocated for this year as savings — a proposal Finance Minister Mangala Samaraweera put forwarded during his Budget speech for this year.
The move to introduce strict cost cutting measures on public finance come as the Government is facing significant challenges in foreign debt servicing in the medium term as predicted in the 2018 annual report of the Central Bank of Sri Lanka (CBSL). The Government’s total outstanding external debt increased to US$ 52,310 million by the end of last year.
“With annual external debt repayment commitments being around US$ 4 to 5 billion from 2019 onwards, there is a significant borrowing needs in the form of international sovereign bonds and other financing facilities from international financial markets,” the CBSL report notes.