The Cabinet this week gave approval for the Government to revise the Fiscal Management (Responsibility) Act No. 3 of 2003 to increase responsibility in not meeting deficit targets.

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.