SCP- PERFORMANCE
BASED BUDGETING
Country Case Presentation
SRI LANKA
Country paper-Sri Lanka
1
The Country
Sri Lanka is an Island situated in the Indian
Ocean, off the base of the Indian Sub Continent
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Total Land Area - 65,610 sq.km
435 km long and 225 km wide
Commercial Capital – Colombo
Total Population: 20 million; Multi ethnic
& multi religious
 GDP Rs. 3,578 billion
Country paper-Sri Lanka
2
Key Economic Indicators:
Key Economic Indicators
2004
2005
2006
2007
GDP Growth Rate (%)
5.4
6.0
7.7
6.8
Unemployment Rate (%)
8.3
7.7
6.5
6.0
Investment/ GDP (%)
25.0
26.5
28.7
29.5
GDP (nominal) Per Capita $
1,030
1,197
1,355
1,617
-8.2
-8.7
-8.0
-7.7
Budget Deficit/ GDP Ratio (%)
Sect oral
Composition
GDP
Employment
Agriculture (%)
16.8
32.2
Industries (%)
27.0
26.6
Services (%)
56.2
41.2
Country paper-Sri Lanka
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Current Budgetary System
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The current budgetary system of the country is
a mixed system
 Block
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Budgeting
Parliament approves the block budget
MOF fixed ceilings for sectors, line Ministries
(Recurrent + Capital)
Flexibility is given to line Ministries to decide their budget
within the ceiling
 Programme
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Budgeting
Cluster based
Expenditure Head, Programmes, Projects, object code
Country paper-Sri Lanka
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Current Budgetary System- ctd
 Performance
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Medium-term Budgetary Framework
Vision, Mission and KPIs for each line Ministry have
identified. However, linkages between these outcome
indicators and actual budget figures are still weak.
 Line
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Based Budgeting
Item Budgeting
Expenditure figures are available for administrative and
monitoring purposes
Country paper-Sri Lanka
5
Medium-term Macro Economic Framework
(2006-2010)
Indicator
2006
2008
2009
2010
GDP at market price – (Rs bn)
2939
4307
5047
5923
GDP growth (%)
7.7
7.0
7.5
8.2
Total investment
28.0
30.0
31.5
32.5
-1478
-1545
-1664
-1881
Current Account Deficit
-5.3
-4.0
-3.9
-3.9
Revenue
16.3
17.4
18.0
18.5
Expenditure
24.3
24.4
23.9
23.7
Overall budget deficit
-8.0
-6.8
-5.8
-5.2
Current Account (US $ mn)
Country paper-Sri Lanka
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Legal Framework
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Constitution- empowers parliament
Finance ActAppropriation ActFiscal Responsibility Act
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Budget deficit shall not exceed 5% of GDP
Total liabilities should not exceed 85% of GDP
Financial Regulation
Country paper-Sri Lanka
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Vision for a new Sri
Lanka
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Agriculture
Economic Infrastructure
Education
Health
Environment
Public Administration Reforms
Livelihood and Social Protection
Urban Development and Human
Settlements
Tourism
Labour
Science and Technology
Sports and Culture
Development of Conflict Affected Areas
Macro-economic vision
Country paper-Sri Lanka
8
The document contains overall development
policies, strategies, goals, priority areas for
next ten year period.
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Aimed at raising the GDP growth rate in excess of 8% and sustain
this rate for 6 years. (9-10% growth thereafter)
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Raise per capita GNP to US$ 3960/- by 2016 elevating SL’s position
as a middle income country.
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Improve growth prospects with equitable development in the country,
with special emphasis on the needs of lagging regions.
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Enhanced resource allocation for identified strategic priorities in rural
development, education, skills development, health, roads, irrigation
& delivery systems.
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Raise Investment/ GDP ratio to a level of 32 to 38% during next 10
years.
www.treasury.gov.lk
Country paper-Sri Lanka
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Medium Term Budgetary Framework
10 Year
Plan
MTEF 1
MTEF 2
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MTEF 3
Budget estimates are now presented over 3 year horizon.
The present MTBF is from 2008 to 2010
Project/
Programme
1
2008
Estimate
2009
2010
Projection
Projection
2 etc
Country paper-Sri Lanka
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Budget Calendar
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Preparation of the MTBF and approval of the Hon.
Minister of F&P for the Budget Circular- June
Briefing note to Cabinet on budget outline and prioritiesJuly
Issuing the budget circular calling for proposals- July
Review of budget requests with line Ministries- August
Presenting the Appropriation Bill (Cabinet + Parliament)October
Budget Speech- November
Release of cash flow statement- December
Country paper-Sri Lanka
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ACHIVEMENTS TOWRDS PBB
1. MTBF
- 3 year Budgetary framework
- Cluster Basis approach
- More Resources for Priority Sectors
- Performance Targets
- Expenditure Ceilings (Flexibility )
2. Managing for Development Result (MFDR)
- Whole - of Government Approach
- Led By the Ministry of Plan Implementation
- Aim is to enhance aid effectiveness
Country paper-Sri Lanka
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Country paper-Sri Lanka
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WHAT WE DID ? and HOW?
1. Government Level
Country paper-Sri Lanka
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2. Agency Level
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MPI facilitate each ministry to
- Form a committee as change agents
- Develop a Agency Result Framework and Result Card with Mission,
Thrust Areas , Goals, and Key performance indicators (KPI)
- Report Progress on KPIs Using Score Cards
# electronic Project Monitoring System
# 3 Color Traffic lights
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MPI evaluate achievements Quarterly and report to the Cabinet
Completed 3 Phases
# Phase I – 5 Ministries
# Phase II – 12 New Ministries
# Phase III – 18 more Ministries
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ADB’s Redness Assesment toolkit is use for identify capacity
gaps in the Ministries
Country paper-Sri Lanka
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Country paper-Sri Lanka
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Country paper-Sri Lanka
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Gaps in Public Finance Management and Area for
Reforms
Gaps
Reforms Recommended
No linkage between 2 process of
Budgeting and MFDR systems
Top level Leadership
(Political/Official)
Deficiencies in Current Accounting
System
Move towards Resource based
Accounting System
Capacity Gaps
Awareness and Capacity building
Policy Gaps
Integrated National policy framework
Inadequate Discretion for the line
Ministries
More Flexibility
Absence of reward system
Country paper-Sri Lanka
Introduce reward system
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CHALLENGES
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Make a linkage between existing 2 systems of Budgeting and
MFDR
Over coming Capacity gaps
Changes in Attitudes and Mindsets
Improving availability of statistical information
Hard Budget Constraints
Tribunal environment
Country paper-Sri Lanka
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Thank you
Country paper-Sri Lanka
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