Kick-starting economic revival | Daily News

Kick-starting economic revival

President Ranil Wickremesinghe in his Inaugural Address to the Ninth Parliament shortly after assuming duties as Head of State in July said he would be planning the course of the economy, so that Sri Lanka would be a fully developed country by 2048.

In the Interim Budget he presented to Parliament on Tuesday, there were clear indications that he had set the groundwork for this. He has dared to venture into areas that would have challenged most other leaders who ruled the country. The divestiture of loss-making State Sector organisations was opposed by the SLFP faction of the Yahapalanaya, forcing this most important aspect towards reviving the economy into the back burner. Ditto for expanding the tax base as a means of generating more State revenue.

President Wickremesinghe, though, has taken the plunge. He proposes to restructure 50 loss-making State enterprises by inviting private sector participation. The proposal to have all those above 18 years registered with the Inland Revenue Department (IRD) is a clear indication that the tax net is going to be thrown far and wide.

Large scale tax evasion has been rampant in this country and the weak mechanism for collection has been the primary reason. We have doctors, lawyers etc. who earn megabucks not paying taxes while fattening themselves at the expense of the public. It is hoped that the new move would help rope in all tax evaders and swell the depleted State coffers.

Similarly, a mechanism should also be established to net in all black money in circulation and the billions of dollars stashed away in offshore accounts. Every available measure should be explored to collect the maximum amount of revenue due to the State from whatever source and wherever they are found.

The measures to curb waste announced by the President in the Interim Budget too could go a long way in preventing colossal amounts of money being fritted away and in turn augment State coffers. A US-style Director General (DG) proposed to be appointed to monitor corruption and expenditure management in the State institutions was a long overdue measure together with a new institution to restructure State Organisations.

As the President rightly noted, nationalization in the past had only led to the income earned by the State through taxpayers’ money being thrown away to pay the debts of these loss making bodies. Certainly, had the Anglo-Dutch Petroleum giant, Shell, not been nationalized in the early sixties we may not have plunged into the worst fuel crisis ever encountered.

Now we are desperately calling for foreign petroleum companies to open up business here which indeed is rather late in the day. In this regard the President had occasion to recall a statement of JVP firebrand Sunil Handunhetti who opined the other day that the primary function of Governments should be drawing up policy and not getting involved in doing business. Had this wisdom dawned on the leaders of Socialist Governments in the past the country would not have been in this predicament today.

The Interim Budget has made genuine efforts to ease the hardships of vulnerable sections of the public. The increase in the Samurdhi benefits and provision of the Rs. 5,000 allowance to nearly 800,000 in the waiting list for Samurdhi could offer some relief to the downtrodden.

Similarly, the offer of a Rs.10,000 allowance to 61,000 families at the lowest rung of poverty too is an important step, though this could only make for bare survival, given the galloping rate of inflation. Calculated at the rate of four members per family there will be 244,000 beneficiary family members. However, according to UNICEF, some 5.7 million Sri Lankans are in dire need of nutrition and of this the UNICEF could support only 1.7 million to overcome their hunger. What is going to happen to the rest?

Hence, avenues should be explored to offer some form of relief to this group of persons who are in want. There will be further increases in the prices of consumer goods because traders are going to pass on the increase in VAT on to the consumer as has always been the case.

The proposal announced by President Wickremesinghe to write off State Bank loans of farmers, save for the interest, could not have come at better time for the farming community, who had been dealt multiple blows while being squeezed on all fronts. First it was the ban on chemical fertilizer and other agrochemicals that wrecked their crop cultivation and if that was not enough, they were also deprived of adequate fuel for their tractors and harvesting machines.

Interestingly, most Samagi Jana Balawegaya MPs who were after all UNPers not long ago did not see any positives in the Interim Budget while the Pohottuwites were full of praise for the Budget presented by the UNP Leader - a typical case of Sri Lankan politics.

President Wickremesinghe once again invited those in the Opposition to be partners in an All Party Government (APG) while being free to take a stand on any policy differences on his part. This is the only way the country could move forward.


Add new comment