Crisis-hit Sri Lanka passed the budget bill of 5.82 trillion rupee ($15 billion) aimed to improve country’s financial situation.

The Parliament approved the budget for the year 2023 on Thursday, with 123 lawmakers voting for and 80 against it. Two lawmakers abstained.

The budget was tabled on November 14 by President Ranil Wickremesinghe, who is also the finance minister.

The budget is viewed as International Monetary Fund (IMF) friendly budget as it aims at restructuring state-owned enterprises, reducing subsidies for electricity, and increasing taxes to boost state revenue based.

The provisions of the budget are based on the proposals by the IMF under a preliminary $2.9 billion bailout plan.

The IMF agreed to disburse $2.9 billion bailout plan in September, but the progress was slowed down due to the condition that agreeing with the island’s creditors were required before the disbursement.

Speaking at the Parliament, Wickremesinghe said the budget seeks to introduce unpopular reforms arguing that as the current economic crisis precipitated largely due to many popular decisions taken historically for political reasons, reports PTI news agency.

“The government has no income. Printing money would cause the devaluation of the rupee. If we are to raise VAT it would lead to problems,” Wickremesinghe said.

The opposition criticised the government’s budget for failing to provide economic relief to the public who have been hit by high inflation.

It also hit out against the government’s proposal to privatise the profit-making state-owned entities such as Sri Lanka Telecom.

Sri Lanka plunged into economic crisis after it could not pay debt due to a severe balance of payments crisis that aroused in the aftermath of the COVID-19 pandemic.

As a result, it led to a shortage of essentials such as fuel, medicine and food, and soaring prices have caused severe hardships for most Sri Lankans. Many have lost their jobs because businesses have become unsustainable.

In April, the government announced that it was suspending repayment of nearly $7 billion in foreign debt due this year.

The total foreign debt of the island nation exceeds $51 billion, of which $28 billion has to be repaid by 2027.

(With inputs from agencies)


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