No drop in Sri Lanka defence spending in first peacetime budget

The Sri Lankan government on Tuesday was due to present its first budget since defeating Tamil separatist rebels last year but was not cutting defence expenditures, legislators said.

Estimates presented to Parliament showed the allocation for defence was expected to be 200 billion rupees (1.8 billion dollars), about the same as last year at the height of military operations.

Government ministers have said that payments were still outstanding on past military purchases.

The budget presentation coincides with a move by the International Monetary Fund to approve two more installments of 407.8 million dollars under its 2.6-billion-dollar credit line to the country.

The release of the budget has been delayed since February because of issues over budget targets.

The two loan installments had also been suspended pending a commitment by Sri Lanka to conform to government spending targets.

The national budget fell short last year because of the global financial crisis, election-related handouts and defence spending.

Sri Lanka is trying to revive its tourism sector as one of the measures to improve its economy It had been hard hit by the 26-year conflict, which ended with the defeat of the Liberation Tigers of Tamil Eelam, which had been seeking a state for Sri Lanka's Tamil ethnic minority.

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