Annual Report 2008 - Ministry of Finance and Planning

2. Fiscal Developments - 2008
73
Table 2.24
A Variance Analysis of Government Expenditure (1)
2008
Budget
2008 Remarks
Salaries &
Wages
233,393 239,078
Enhanced COLA allowance from July 2008 to public servants in the lower grades, in
addition to Rs. 375 increase from January 2007 meeting wage commitments to new
recruitments specially in civil security and defence services, increases in other allowances
for judges and medical officers caused the variance.
Pensions 73,060 74,920
Impact of the entry of more than 12,000 new retirees in 2008 and estimation error caused
the variation.
Interest
Payment
Fertilizer
Subsidy
Transfers
to Public
Corporations
209,825 212,475
15,000 26,450
10,538 12,942
Increase in domestic interest rates and investors moving to short term Government
Securities. In addition, the increase of new funding requirements and shifting of large
share of funds required for financing the deficit to local sources due to the non availability
of anticipated foreign commercial funds resulted in a high interest cost.
Continuation of fertilizer subsidy at a rate of Rs. 350 per 50 kg bag, in the back drop
of high international fertilizer prices consequent to rise in petroleum prices, caused the
variation.
Despite the rate revisions in bus & railway services to mitigate the loss of fuel price
increase and the related cost increases, the adjustments were not sufficient to cover the
operational losses of CTB and Railway caused a variation. The revision in the bus fares
in May 2008, reflected a lower rate in the public sector than the private sector. The rate
revision was 17.4 percent compared to the private sector average of 27.2 percent.
Transfers to
Institutions
27,382 26,407
Samrudhi 10,687 9,995 Better targeting of deserving families.
Other
Subsidies
and Transfers
22,335 20,192
Despite the cost escalation stemming from fuel and related price increases, salary and
COLA increases, strict cash management entrusted upon these institutions helped for
the positive variation.
Although the payments to disabled soldiers and cost of printing of school text books
recorded overruns, better targeting and savings from other transfers caused the positive
variation.
Public
Investment
335,672 263,860
Under performance of some of the foreign funded projects due to procedural issues such
as delays in awarding the contract by project implementing agencies, poor performance
of the contractors, delay in granting approvals for sub loans coupled with shortage in
envisaged rupee funds due to shortfalls in the revenue caused the deviation.
Compiled by Dept of Fiscal Policy
(1) figures as per economic classification
Welfare and Social Safety Net for Vulnerable Groups
Cost effective nutrition intervention programmes that were
initiated in 2006 and 2007 continued in 2008 improving
maternal and child health care. 53,393 mothers have been
benefited at a cost of Rs. 386 million under the programme to
provide a nutritional food package worth Rs. 500 per month
for expectant mothers in 2008. Further, 708,031 expectant and
lactating mothers have been benefited through “Thriposha”
programme utilizing Rs. 627 million in 2008. Fresh milk worth
of Rs. 360 per month was provided for children between 2-5
years benefiting 28,105 children covering 70 AGA divisions.
Funds allocated for School Mid Day Meal Programme
increased with the enhanced coverage of the programme
for grade 1 to 4 children, totaling 575,896 children in underprivileged
areas including North and East at a cost of Rs.
1,649 million in 2008.
Ministry of Finance and Planning Sri Lanka
Annual Report 2008