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Sri Lanka presents budget amid slow economy

Nov 21, 2012 (LBO) - Sri Lanka is presenting at budget to the parliament for 2014 today amid tight economic conditions that has reduced tax revenues in the first half of 2013.
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Sri Lanka was expected to cut the budget deficit to 5.
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8 percent of gross domestic product in 2013 and go for a tighter target the following year.

Sri Lanka's finance ministry has narrowed the deficit in the past year despite revenue to gross domestic falling.

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Though there are concerns that the GDP may be overestimated, analysts say reducing the deficit amid a weaker tax take is the highest type of fiscal consolidation possible, as raising revenues to cut deficits increases the burden of the state and rulers on the people.

In 2012 current expenses as a share of GDP fell to 14.7 percent from 15.4 percent a year earlier, in a high quality fiscal consolidation process even as total revenues fell to 14.

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0 percent of GDP from 14.3 percent.

Classical economists have explained that raising taxes to reduce budget deficit is a dangerous economic myth perpetuated by misguided advocates.




"Those people who are properly worried about the deficit unfortunately offer an unacceptable solution

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