Supplementary Estimate 2022: What it Entails and Its Impact on the Budget Balance

Abstract

Supplementary Estimates are made when the government needs to spend money for which it has not received parliamentary approval. Such provisions are intended to be utilized for urgent and unforeseen expenditure. On 8th June 2022 parliament approved a supplementary estimate of Rs. 695 billion presented by the finance minister. It was presented with the intent to provide relief and additional funding in response to the adverse economic conditions. The breakdown of how the estimate will be utilized is depicted in Exhibit 1. The supplementary estimate will increase government expenditure by LKR 695 billion. The finance minister also revised the revenue estimation for 2022 from LKR 2,284 to LKR 1,600. Based on the increased expenditure and the current expected revenue, the budget deficit for 2022 increases to LKR 3,007 billion . This represents a 43% increase from the original estimated figure of LKR 1,628 billion ( Exhibit 2). Sources - Parliament of Sri Lanka, Parliament News 8th June 2022 available at : https://www.parliament.lk/news-en/view/2595. Speech delivered by the Prime Minister on the 16th of June 2022 available at : https://www.newswire.lk/2022/05/16/the-next-couple-of-months-will-be-the-most-difficult-ones-of-our-lives-special-statement-from-pm/.