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“The interest rates may come down in the next few months,” said Finance Ministry Secretary, Dr. P.B. Jayasundera, at a progress review meeting June 18. The meeting was presided over by President Chandrika Bandaranaike Kumaratunga, who is the Minister in charge and was attended by senior economists of the Ministry. The Ministry intends to maintain the budget deficit below 8.5% GDP this year, which is expected to help curtail domestic borrowing. A reduction in domestic borrowing by the government will help lower interest rates and the target is to bring it down in the next 2 – 3 months, said Dr. Jayasundera. The Budget deficit is to be controlled through better management of public expenditure. Steps taken to reduce unnecessary expenditure in Ministries and government departments have already shown satisfactory results. The two state-owned banking giants, Bank of Ceylon and Peoples Bank, which have a vital impact on the economy, are being re-structured for the first time in their history. The Department of Inland Revenue and the Department of Customs are also being re-structured to increase their effectiveness. These are the two departments responsible for collecting most of the government’s revenue. Although the government has been spending a large sum of money annually to build and maintain roads, the condition of most roads continues to be unsatisfactory. The authorities are now assessing the impact of bad roads on the economy. President Kumaratunga said correct planning could reduce the expenditure on roads by 40 – 50 percent. Good planning mechanisms are vital said the President, and directed that planning units be set up in all Ministries and also that they be provided with the necessary resources and training. Officers involved in planning should be abreast of all new developments in the field the President said.
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