Sri Lanka’s provincial administration is about to crash as the now defunct Provincial Councils has no legal authority to collect revenue and make legitimate payments.
Provincial Councils receive revenue from levying taxes, grants by the Government, loans advanced from the Consolidated Fund, and other receipts.
Fund raising provisions have been stipulated in Section 19 sub-section (1) of the Provincial Councils Act No 42 of 1987.
The average expenditure of these councils is in the region of Rs.220 billion per annum. The Provincial Fund provides finances for the maintenance functions and workings of the councils.
The required money for the expenditure can be withdrawn from the fund only under a warrant signed by the Chief Minister of the Province.
At present most of the Provincial Councils stand dissolved and the conduct of provincial polls is not in sight in the coming months.
The Supreme Court has determined that the provincial elections cannot be held under the existing or previous Provincial Council’s Elections Act without a delimitation report.
Therefore in the coming months, the provincial management will have to face severe difficulties in carrying out its normal functions
The payment of salaries and expenditure for day-to-day functions of Provincial Councils are being met with loans from the Treasury and budgetary allocations of the ministry.
The Treasury is facing an enormous challenge of meeting the recurrent expenditure of ministries and state institutions including Provincial Councils along with interest payments which is around 42 per cent of the 2019 budget revenue (35 per cent of GDP)
(LI)