Sunday, 25 October 2020 11:28

Government grapples for few billion rupees more to help people hit by Covid19

In the wake of second wave of the Covid19, support for public health services and financial support for households and businesses will add new spending pressures for the government amid lower revenue collection in 2020 as economic activity weakens.

This will shove the fiscal deficit up, amid already high public debt and external refinancing needs, Finance Ministry sources revealed.

Export and tourism earnings, as well as remittances will come down amid a global slowdown.

The current account deficit is expected to widen to 2.8 percent of GDP in 2020 before falling to 2.6 percent in 2021, Treasury data showed.

However, drop in imports reflecting the reduction in global oil prices and energy demand, and restrained domestic demand will help to tackle the situation up to certain extent.

The country’s health services will have to be maintained with a meager sum of Rs. 76 billion allocated for September-December period from the recent vote on account.

The Health Ministry has to present a supplementary estimate in parliament if this money is not sufficient maintain health services under the second wave of Covid-19.

The country implements a strategic preparedness plan since March to date to achieve the key objectives of preparedness and response to sporadic cases of COVID-19 at cost of US $532.57 million (Rs98.billion).

With the current transmission scenario of having clusters of cases, the interim plan is updated to consider the evolving situation and needs and to plan for combating possible community transmission.

In order to grant relief of Rs.5000 each for the affected people in Minuwangoda and Divulapitiya clusters, a sum of around Rs. 1.62 billion is needed at present, provisional estimates revealed.

But to provide relief for the people in entire Gampaha district, this amount will be increased up to at least Rs.11.52 billion.

Cabinet of ministers should approve the allocation of this additional expenditure from the treasury, a senior official said.

If the Covid-19 second wave aggravated compelling the government to lock down the whole country a Massive sum of Rs25.72 billion will have to be spent to make a onetime Rs 5000 payment for each and every affected person. .

The island’s relief allocation which includes cash disbursements to households is estimated at less than 0.5 percent of GDP.

The Government has to provide relief amounting to Rs. 45.5 billion for households including around 4 million workers under the present circumstances, provisional estimates showed.

 

However, the actual amount cannot be computed as it depends on the amount of relief payment and the rime period, senior official said

 

(LIN)

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