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Budget glossary

Budget words in plain language: what Head, recurrent, charged expenditure, debt servicing, nominal and real terms and other budget terms mean.

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APIT: Advance Personal Income Tax: income tax that an employer takes from a salary and pays to the Inland Revenue Department, similar to PAYE in other countries.
Appropriation Act: The law, passed each year by Parliament, that authorises the government to spend money. Before it is passed it is called the Appropriation Bill.
Appropriation Bill: A draft law that lets the government spend money for a year. It becomes an Appropriation Act once Parliament passes it.

Borrowing limit: The most that may be outstanding from borrowing during or at the end of the year, as set in the Bill.
Budget deficit: What is left when revenue and grants do not cover spending. The government borrows to make up the difference.
Budget speech: The statement the Minister of Finance makes to Parliament about the government's plans for revenue and spending. The Appropriation Bill is the legal document that sets the spending amounts.

Capital expenditure: Spending on assets and development, such as buildings, roads and equipment. In the schedules it also includes repayment of public debt by the Department of Treasury Operations.
Charged expenditure: Spending that the Constitution or another law puts directly on the Consolidated Fund, such as debt servicing and pensions. It is listed in the Second Schedule.
Consolidated Fund: The main government account into which revenue is paid and from which spending is made.
CPI and NCPI: Consumer price indices that measure how prices change. Budgets LK uses the National Consumer Price Index (NCPI) to restate old amounts in recent prices.

Debt restructuring: Agreeing new terms with lenders, such as longer repayment times or lower interest, so that a debt can be paid.
Debt servicing: The cost of carrying debt: interest payments plus repayments of the loans themselves. In the Act it is charged on the Consolidated Fund under the Department of Treasury Operations.
Domestic debt: Money the government owes to lenders inside the country, such as banks and other holders of government securities. Since 2019 the Central Bank counts bonds held by residents as domestic and by non-residents as foreign.

Excise duty: A tax on particular goods, such as fuel, alcohol, tobacco and vehicles, that is included in their price.

First Schedule: Sums payable for general services, listed by ministry, Head and programme.
Fiscal year: The twelve months the budget covers. In Sri Lanka it is the calendar year, 1 January to 31 December.
Foreign debt: Money the government owes to lenders outside the country, often in foreign currency such as US dollars.

Gazette: The official government publication in which Bills, laws and notices are printed. Budgets LK reads the Appropriation Bill from the gazette.
GDP: Gross domestic product: the total value of goods and services produced in a country in a year. It is used to compare budgets and debt with the size of the economy.
Grants: Money given to the government, for example by foreign governments or agencies, that does not have to be repaid.

Head: A numbered spending unit, usually a department. Head numbers stay the same when ministries are renamed, so this site follows each Head across years.

IMF programme: A lending arrangement with the International Monetary Fund that comes with conditions on policy. Sri Lanka's 48-month Extended Fund Facility was approved on 20 March 2023.
Inflation: The general rise in prices over time. When prices rise, the same number of rupees buys less.
Interest: The price paid for borrowing money. It is a cost that has to be met every year while the debt is outstanding.

Ministry: A government ministry, which may hold one or several Heads. Ministries are renamed and merged often, which is why this site follows Heads across the years.

Nominal figures: Amounts at the prices of each year, not adjusted for inflation.
Non-tax revenue: Money the government earns that is not a tax, such as fees, profits and dividends from state-owned enterprises, and rents.

Primary balance: The budget balance before interest payments. A primary deficit means the government spends more than it collects even if interest is left out.
Principal: The amount that was originally borrowed, as opposed to the interest charged on it.
Programme: A Head is split into Programme 01 (operational activities) and Programme 02 (development activities).
Public Financial Management Act: Public Financial Management Act, No. 44 of 2024: the law that sets the rules for how public money is planned, spent and reported.

Real terms: Amounts adjusted for inflation so that years can be compared fairly. The opposite of nominal figures.
Recurrent expenditure: The day-to-day cost of running services, such as salaries, supplies and maintenance.
Revenue: Money the government collects. It is made up of tax revenue and non-tax revenue.
Rollover: Taking a new loan, or extending an old one, to pay off a loan that has fallen due. The repayment appears in the budget, and so does the new borrowing.

Second Schedule: Expenditure charged on the Consolidated Fund by the Constitution or other laws, such as debt servicing, pensions and the independent commissions.
Supplementary estimate: A request for extra spending approved during the year, when the original amount for a purpose is not enough.

Tax revenue: Money collected from taxes, such as income tax, VAT and import duties.
Third Schedule: Limits for advance account activities, such as advances to public officers.

VAT: Value Added Tax: a tax on most goods and services, added at each stage and included in shop prices. The standard rate is 18%, in force since 1 January 2024.
Vote on account: Temporary permission from Parliament to keep spending for a period before the full Appropriation Act is passed, for example at the start of a year or while Parliament is dissolved.

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