Press briefing of Cabinet Decision taken on 2019-07-02

Revision of the Policy Framework of the Government Fiscal Rules

- The Government Fiscal activities of Sri Lanka are handled under a Fiscal Management Responsibility Framework introduced by the Fiscal Management (Responsibility) Act, No.3 of 2003 enacted for public debt sustainability and the management of fiscal risks. However, the objectives envisaged in the Fiscal Management (Responsibility) Act, have continuously been failed to achieve since 2006 due to the macro economic and fiscal challenges which had to be faced since its introduction, the Tsunami devastation and the prolonged internal conflict. As such, certain above said government fiscal targets have been revised in the year 2013 and 2016. Accordingly, the proposal made by the Minister of Finance, to amend the Fiscal Management (Responsibility) Act, No.3 of 2003 with a view to strengthening the responsible fiscal management, revising the existing Fiscal Regulation Framework inclusive of the Debt Rules, a Medium Term Fiscal Framework, Operational Targets, an Automatic Correction Mechanism, Flexibility, Transparency, Accountability and Oversight or to include the relevant amendments in the Fiscal Management Act, now being drafted, was approved by the Cabinet.