Govt. yet to decide how to finance Rs.1.1tn unaccounted borrowings

The government has not yet decided on how to finance the Rs.1.1 trillion in undocumented borrowings taken by the past regime, Finance Minister Ravi Karunanayake said. Mirror Business reported last week that the Finance Min i s ter had asked international parties not to worry over this unforeseen debt.

“We haven’t yet decided on how to adjust taxes. We will repay this without putting pressure on the public,” Karunanayake said. An increase in taxes would reverse his policy of making Sri Lanka one of the lowest tax regimes in the world.

He was also not keen on asking the International Monetary Fund (IMF) for help in repaying the debt, repeating that an understanding with the IMF is only a contingency plan devised out of foresight. “We don’t need the IMF to pay this.

We can pay on our own,” he added. He noted that 60 percent of the debt was from foreign sources. However, Karunanayake said that the debt, which adds up another 10 percent to last year’s budget deficit, might not be included in the budget. “We won’t bring it into the budget in one go. We are professionals. We know how to do it professionally,” he said. Karunanayake said that these loans were signed by

former President Mahinda Rajapaksa without going through the due process. “These are the sins of the past government. They had taken loans for building roads and wasted them on festivals. We knew they had secrets but we didn’t know they went this far,” Karunanayake said