The government budget: a critical appraisal with reference to transparency and accountability

The government budget: a critical appraisal with reference to transparency and accountability

Understanding Sri Lankan government budget

This briefing paper, prepared for the purpose of educating legislators in Sri Lanka on issues relating to their government budget, addresses the following questions:

  • what is a government budget?
  • what are the laws governing the budget at national, provincial and local levels?
  • how is it prepared, enacted, implemented, and monitored and audited?
  • what are the best practices in budget formulation, enactment, implementation, and monitoring and auditing internationally?
  • how can the government improve the accountability and transparency of the budget?
  • what could be done to improve the technical capacity of people’s representatives in particular to effectively and efficiently contribute to budget debates
The paper observes that the current method of preparing budget in Sri Lanka is regressive. In this method, the government first determines the likely public expenditure and then finds out ways of financing such pre-determined expenditures by way of direct and indirect taxes, other government revenues, domestic borrowings, external borrowings etc. The author argues that the progressive way of preparing the budget would be to determine the likely government revenue first and then allocate such revenue to various expenditures.

The paper makes some suggestions for enhancing transparency and accountability of the budget in Sri Lanka, which include:
  • the executive President should be made ineligible to hold the portfolio of minister of finance
  • budget committee should be set up in parliament comprising members from all political parties represented in parliament
  • budget should be tabled in Parliament by mid-year instead of the current practice of tabling it in November
  • Auditor General’s department should be made totally autonomous in terms of personnel, finance etc
  • Fiscal Management (Responsibility) Act should be amended to incorporate a clause that no government will be permitted to increase the total public expenditure over 50 per cent of the rise in nominal Gross Domestic Product
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