The 2021/22 Budget is claiming to set a new strategy with a key pillar, namely “Giving an Exceptional Boost to Investment”, as mentioned in para 28. The Budget, at Para 32, aims at “launching an unprecedented investment drive in the economy”, and refers, at para 132, to “the surge in public sector investment over the next three years”.
Let us look at the facts. The Budget Estimates provides details on total public sector investment as part of the “Statement of Government Operations”. Total Public Sector Investment is defined as capital projects by Central Government, both under the Consolidated Fund and Special Funds, parastatal bodies, state owned entities and public entities.
The table below shows the original and revised estimates of total public sector investment for the past five years, as shown in successive Budget Estimates. It also includes the estimates for the next three years, as indicated in the 21/22 Budget.
The estimate of Rs50 bn of total public investment for 21/22 is neither “exceptional” nor “unprecedented”, as claimed. Total public investment is in fact lower than estimated in 18/19, and equal to the 19/20 estimate. And the estimates of total public investment show a decline in the years 22/23 and 23/24.
Moreover, the revised estimate is almost stable, amounting to around Rs26 bn year after year. The revised estimates provide a measure of the rate of project implementation, which stands at an average of only 58% in the last five years. The revised estimate of total public investment in 21/22 will therefore most likely be around Rs26 bn.
The surge in public sector investment is a big budget bluff (BBB). The 2021/22 Budget is summed up by 3B’s instead of 3 Rs.
