Government revenue in 2021 covered only 41% of its expenditure

Government revenue in 2021 was only 41% of its expenditure, which was inadequate to cover even its recurrent expenditure. It falls short of the two largest recurrent expenditure components cumulatively – salaries and wages, and interest payments, according to Verité Research Insights (Public Finance.lk) which provide analysis and infographics on the most pertinent issues relating to public finance in Sri Lanka.

It shows that Sri Lanka’s revenue has been insufficient to cover its recurrent expenditure since 1983. The gap between recurrent expenditure and capital expenditure in the country continues to grow, proving to be difficult to reduce, while revenue too has not kept pace with expenditure levels for decades. To close the growing revenue-to-recurrent-expenditure gap, serious revenue-boosting measures would be required.