Budget Check 2022

Following the success of last year’s #BudgetCheck, FactCheck.lk by Verité Research carried out live fact checking on claims made by Finance Minister Basil Rajapaksa in his 2022 Budget Speech on 12 November 2021.  

The team fact checked a total of nine statements from the Budget Speech. Of these, four statements were graded True, three False, one Partly True, and one Blatantly False. See below for statements fact checked along with their narrative, verdicts, and relevant sources.

Number 1: 

Statement: It can be seen that imports have been twice as much as exports over a period of time.

Fact check: Since 2010 the value of goods imported have been 2 times exports only in 2012. They have been 1.8-2 times exports in 5 years: 2011,15,16,17,18; and less than 1.8 times in the other 5 years.


Number 2: 

Statement: In 2021 alone, 20% of the government recurrent expenditure had to be spent on social welfare.

Fact check: The 2021 mid-year fiscal report reports expenditures for Jan-April 2021: recurrent LKR 890,085 million, Social welfare LKR 35,840 million (just 4% not 20%). Updated figures are not published—the claimed 20% is unachievable based on available data.

Verdict: FALSE

Number 3:

Statement: The amount that the government has invested in [nearly 300 SOEs in the country]… is more than Rs. 670 billion. Additionally, around Rs. 75 billion is spent annually in order to maintain them.

Fact check: Ministry of Finance Annual Report for 2020 shows the capital outlay for SOEs as LKR 670 billion; and government contribution to public institutions as LKR 72 billion more than the revenue collected from them. (LKR 89 billion as contributions and collected LKR 18 billion as revenue from Profits and Dividends)

Verdict: TRUE

Number 4: 

Statement: Although we earn around 4.5 – 5 billion [USD] from apparel exports, we also spend about 2 billion [USD] to import fabric from abroad.

Fact check: Between 2017 – 2020, Sri Lanka earned between USD 3.9 billion to 5.2 billion on exports of garments and spent between USD 2.3 billion to USD 2.8 billion on the imports of textile yarn, fabrics, made-up articles, and related products. 

Verdict: TRUE

Number 5: 

Statement: The loss of revenue up to now, which the treasury should have received is more than Rs. 500 billion.

Fact Check: The 2020 Ministry of Finance Annual Report estimated a revenue of LKR 1,961 billion for the full year 2021. The realised revenue in January-July 2021 is LKR 799.8 billion. If we project the estimated and actual revenue to 10 months (end October) the difference between estimated and realised would be LKR 491.6 billion. 

Also refer to the following previous fact check: https://factcheck.lk/claim/basil-rajapaksa

Verdict: TRUE

Number 6: 

Statement: Interest expenditure on public debt has become the single largest expenditure item in the budget.

Fact check: Interest on debt, which is an expenditure, was allocated LKR 1,057 billion (29% of expenditure). The rest of the recurrent and capital expenditure allocated was LKR 1,821 billion and LKR 729 billion respectively. Since these were divided among many expenditure heads, interest payments are the largest single expenditure head in the budget.

Verdict: TRUE

Number 7: 

Statement: 80% of the government tax revenue…is derived from 20% of the tax payers.

Fact check: Total govt. tax revenue was 1,216 billion (2020). 78% of it is collected through indirect (consumption) taxes on the whole of the population. Additionally, 18% is collected from corporates and 4% from all other sources (including individual).

Verdict: FALSE

Number 8: 

StatementSri Lanka is almost on par with developed countries as per the quality of life indices.

Fact check: Sri Lanka is ranked 73 out of 189 countries on the Human Development Index (HDI). HDI is the best known quality of life index, & Sri Lanka is not on par with developed countries that are classified as having “very high human development”.

Verdict: FALSE

Number 9: 

Statement: the deficit in the primary account (total revenue minus other expenditure, excluding interest payments) as a percentage of the Gross Domestic Product was 1.5 percent in 2010, and has increased to 2.9 percent in 2015, and to 4.6 percent in 2020.

Fact check: The 2020 primary deficit was 7.4% not 4.6%. Several government reports in 2020 carried an incorrect presentation of the budget deficit, which is fact checked here:   https://factcheck.lk/claim/harsha-de-silva-6. The primary deficit did not have a steady upward trajectory either as presented by the statement. It was close to zero or a Primary Surplus between 2016- 2018.