Relief for the masses | Daily News

Relief for the masses

One of the biggest blunders done by the previous Government was heaping burden upon burden on the people, who were already hard hit by the high Cost of Living. Former Prime Minister Ranil Wickremesinghe waxed eloquent about making Sri Lanka another Singapore by 2040, neglecting the day-to-day travails of people who were struggling to survive. He even offered free Wi-Fi to people who could not afford two square meals per day. Worse, there was a so-called fuel pricing formula that dumbfounded even the brightest mathematicians and economists in the country – the only thing most people knew was that fuel prices went up by Rs.10 every month.

Long term plans are necessary, but not at the expense of the everyday concerns and difficulties of the people. This naturally alienated the Government from the masses, who were yearning for a change. It is into this vacuum that President Maithripala Sirisena stepped in, to change the status quo by appointing former President Mahinda Rajapaksa as the new Prime Minister. It is well known that Prime Minister Rajapaksa feels the pulse of the people. Wearing his other hat as the Finance Minister, the Prime Minister has already reduced fuel prices twice and given many other concessions to the people.

Now the Government has announced that under the guidance of Prime Minister Mahinda Rajapaksa, it will introduce a relief package to help the people affected by the poor financial management and policies of the previous UNP government. The Finance Minister will implement the package aiming to ease the people’s burdens while strengthening the country’s moribund economy.

An alarming feature of the previous administration was its almost total neglect of the agricultural sector. Prime Minister Rajapaksa told a gathering on Thursday that this may have been done at the behest of the multilateral lending agencies, which usually have other agendas for emerging economies. Thus they did little to develop the sector, other than blame the drought that prevailed in some areas.

Agriculture is the lifeblood of the economy, with nearly half of the country’s population dependent on it in some way. A Government ignores agriculture at its peril. In a symbolic gesture, on the very day after the change of Government, President Sirisena participated in the “Vap Magula” ceremony signifying the new Government’s commitment to agriculture.

More attention will now be drawn to strengthen the agriculture sector. The sector will receive tax concessions and other incentives. As an example, Prime Minister Rajapaksa as Finance Minister has submitted a proposal to do away with the 14 per cent tax imposed on agricultural products, for a period of five years. Accordingly, the Government will take immediate steps to remove the 14 per cent tax imposed on profit earned from selling agro products.

This is a very good move. More concessions are apparently on the way. But there are a few problems that have to be addressed by the authorities. Sometimes there is a glut of certain crops such as big onions and even paddy in certain harvesting seasons, which leads to a situation where the farmer is unable to sell the excess quantities at any price. This leads to a massive waste of food products, not to mention a huge loss of revenue for the farmers.

In this context, the Government should address Post Harvest Losses (PHL) which can sometimes amount to more than 40 percent of the total harvest. A huge quantity of food is wasted in handling, transport and storage – it is vital to perfect strategies to prevent this. We still do not have mechanisms for the storage and preservation of food items other than paddy. Such mechanisms will help prevent PHL. Moreover, we must find export markets for our excess food products.

The export sector was another sector affected by the narrow sighted unsystematic monetary decisions made by the previous government. The sector was heavily taxed, which led to the loss of our exporters’ competitive advantage in terms of world trade. With economists predicting that Sri Lanka has the potential of reaching a US$ 50 billion export target in the medium term, the sector definitely deserves all the incentives and concessions that the Government can provide. Some of the best economies in Asia including China and Singapore are leading exporters. In fact, improving local production (primarily agriculture and industry) and exports is one of the main time tested development strategies all over the world.

The economy was badly affected during the last three years, beginning with the massive Bond Scam. Economic growth has come down to its lowest levels in recent years, along with the disastrous fall of the Sri Lanka Rupee, which this Government is trying to reverse. The stock market too was not performing well. However, there are no overnight solutions to longstanding economic woes and people should not expect quick miracles. But from what we can see so far, the economy is in good hands. Even at the height of the war under then President Rajapaksa, the Rupee was stable and economic growth was quite respectable. There is no doubt that this can happen again. 


 

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