As of August 31, last year, the government owed Rs.360 billion to various contractors and suppliers. As of January 31, 2023, the government has been able to settle 53 percent of these bills, amounting to Rs.191 billion.

Siyambalapitiya emphasised that it should be viewed as a positive development that the government was able to settle the majority of the arrears, despite the estimated 8 percent economic contraction in 2022.

According to Siyambalapitiya, the government still needs to settle Rs.169 billion in arrears. Rs.100 billion worth of outstanding bills are categorised as recurrent expenditure, while Rs.69 billion is categorised as capital expenditure.
He noted that several of these outstanding bills would be settled on a prioritised basis and it include Rs.18.9 billion worth of outstanding bills for health and medicine, Rs.19.3 billion for pensions and gratuity and Rs.12 billion for fertiliser and chemical supplies.

Upon the recommendation of a committee appointed by the Treasury secretary, the Cabinet of Ministers this week approved a proposal to settle the outstanding payments owed to various parties by issuing Treasury bonds.