Sri Lanka's Parliament on Thursday approved the 2023 budget, with 123 lawmakers voting for and 80 opposing it in the 225-member House.
President Ranil Wickremesinghe, who is also the finance minister, had presented the budget on November 14 featuring tax reforms to raise revenue by over 65 per cent. The budget is seen as an International Monetary Fund (IMF) friendly budget.
On Thursday, the Parliament passed the budget for the year 2023 following the third reading, with 123 lawmakers voting for and 80 against it. Two lawmakers abstained.
On November 22, second reading of the budget was approved by a majority of 37 votes in Parliament with 121 members voting in favour while 84 against.
Wickremesinghe told parliament that the budget was aimed to introduce unpopular reforms as the current unprecedented economic crisis the island is faced with was largely due to many popular decisions taken historically for political reasons.
"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 summed up the poor fiscal situation.
Wickremesinghe in the budget had proposed to privatize some of the loss-making state enterprises such as Srilankan Airlines and the proceeds would be used to boost the foreign reserves.
The opposition had argued that the government failed to provide any economic relief to the public who have been hit by high inflation.
The budget proposal to privatize even the profit-making entities such as Sri Lanka Telecom was subject to criticism from the opposition.
Sri Lanka in September agreed with the IMF to obtain a USD 2.9 billion facility over four years. The progress has been slowed down due to the IMF condition that agreeing with the island's creditors were required before the disbursement.
Sri Lanka, a country of 22 million people, plunged into financial and political turmoil earlier this year as it faced a shortage of foreign currencies. It declared bankruptcy in mid-April and has suspended repaying its USD 51 billion foreign debt, of which it must repay USD 28 billion by 2027.
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