The government earlier decided to allocate one million rupees for each Grama Seva Division to carry out minor development activities. The United National Party (UNP), appeared to be the political authority for implementing these works. It displeased the Sri Lanka Freedom Party (SLFP) members of the national government, who eventually raised it with President Maithripala Sirisena, the party leader.
The matter cropped up at the Cabinet meeting conducted for the first time after the New Year celebrations. According to political sources, the President has decided to make similar allocations to the SLFP MPs too. However, it is Housing Construction Minister Sajith Premadasa who expressed reservations about it. He viewed that the SLFP MPs, who are only with the government should be considered [ for such allocations] It meant that those with the Joint Opposition or the faction of former President Mahinda Rajapaksa would be excluded in the process.
After much thought, the President decided to appoint a committee comprising himself, Prime Minister Ranil Wickremesinghe and Finance Minister Ravi Karunanayake to decide on the disbursement of money for the projects to be executed across the country.
This was another instance where the UNP and the SLFP encountered problems on policy implementations. The other matter which dominated news during the last few days, was the President sending a tough message to those who proposed tax reforms- to increase the rate of Value Added Tax (VAT) from 11 per cent to 15 per cent, and to remove certain tax exemptions enjoyed by sectors such as health, education and telecommunication. There was also a proposal to increase the 
Nation Building Tax.
In a direct reference to these moves aimed at boosting state revenue, the President said he would leave no room for tax impositions burdening the general public.
The top brass of the government felt the pinch in this matter after the media carried extensive coverage on the possible consequences of these tax hikes by way of price increases of consumer goods and services in various forms.
The political forces, opposed to the National Unity Government, made a hue and cry about the move and it galvanised public opinion against the ruling side. Eventually, it evoked a response from the President and became the centre focus at Tuesday’s Cabinet meeting chaired by him.
Government ministers held the view that the adverse and distorted misrepresentation of facts resulted in public wrath, and therefore it should be corrected forthwith through a publicity campaign.
“What is projected is that the government moved to increase VAT by 15 per cent. It is only a four-percent rise from the present rate of 11 per cent. We have introduced VAT only for private health and education sectors newly. It is not for state education and health sectors. This has to be explained to 
the public through a proper media campaign,” a minister said.
The assumption here is that private health and education are the main services sought after by the wealthy and that ordinary people will not be affected by the application of VAT to these sectors. This is far from reality as middle class people, comprising public servants, seek such services in a big way. The VAT increase will undoubtedly inconvenience them.
Today, we see parents mobilising all possible resources to finance their children’s education at private degree awarding institutions whenever they are unable to secure placements in state universities. So there would be a rise in fees for these students. Likewise, the private health is no longer reserved exclusively for the wealthy. Given the rush at state hospitals and the absence of basic amenities, people look to private sector healthcare hospitals and medical centres springing up all over the country. The proposed VAT imposition will add to their charges.
However, it still remains uncertain whether the government will proceed with the proposed hikes as planned in the backdrop of rising public resentment. But, the government is in dire need of money to address liquidity issues.
It will be a difficult balancing act. On the one hand, the government has to boost its revenue and also to quell public unrest. The government is of the opinion that last year, it has already done much, by reducing prices of fuel and some essential food commodities and granting a monthly allowance of Rs.10, 000 to public servants, to cushion the burden on the people; decisions that had been costly.
The present differences between the UNP and the SLFP have left scope for some analysts to interpret whether the ruling coalition will come loose paving the way for political instability. It is unlikely that such spats would snowball into a situation where they part ways.
The President does not seem to be keen to take any action that would rock the boat. In one perspective, he is politically obliged to the UNP that formed the foundation for his victory at the January 8th Presidential Election. Hence it is difficult to anticipate if he would take any drastic action that would make way for a change of government or Cabinet at least during the two- year period agreed upon for cohabitation between the two sides in the national unity government.
Towards the tail end of Tuesday’s Cabinet meeting, the President, in fact, rebuffed the Joint Opposition’s clamour to form a new government. The President is reported to have asked how the Joint Opposition can establish a government when it has only 50 MPs.
CC votes in new IGP
The appointment of the Inspector General of Police (IGP) was the major activity decided upon by the Constitutional Council after the New Year. The CC, the ten member body chaired by Speaker Karu Jayasuriya, met in the parliamentary complex last Monday. Two out the three civil society members- Sibly Azis and Dr. Radhika Kumaraswamy, were absent on that day.
Janatha Vimukthi Peramuna(JVP)’s Vijitha Herath, who is the CC representative of the minor parties, said at the beginning that the President had sent three names – S.M. Wickramasinghe, Pujith Jayasundara and .C.D. Wickramaratne- to be considered, but he should have recommended only one name as per the constitutional provisions. He recalled the CC acted accordingly in the appointment of 
the Attorney General a few months ago, it should now follow suit.
Ministers John Seneviratne and Wijeyadasa Rajapakshe also held similar views, more or less. Finally, it was concluded that it was not essential for the President to send only one name. The three senior police officers who been convened on that day, were seated outside the room where the meeting was in progress. In their absence, the CC members perused the qualifications of the three members with focus on their seniority and whether there were human rights and bribery charges against them.
The CC established that no charge was serious in nature, and decided not to interview each of them individually. Instead, they were invited to the meeting room for a short while and greeted for the season. It was widely believed earlier that Mr. Wickramasinghe would be handpicked for the post as he was a close confidant of the President. However, the CC held the position that the appointment of someone, identified as an accomplice of the President, did not gel with the concept of good governance as one could perceive conflicts of interests in the discharge of duties. Later, a secret ballot was conducted to select the next IGP. The Speaker did not participate in it, instead, seven other participants voted. Five voted in favour of Mr. Jayasundara and one each for the other two officers. Accordingly, Mr. Jayasundara’s name was sent for final endorsement by the President.
SLFP factions to be pitted against each other on May Day
SLFP is to go ahead with its May Day rally in Galle, but its seniors warned that the decision by a section to team up with the Joint Opposition would only widen the existing rifts.
The SLFP had a meeting with its trade union wings on the preparations for May Day. Labour and Labour Relations Minister John Seneviratne said the party members participating in two different rallies, would only be a stumbling block for efforts to unite it.
He said MPs Mahindananda Aluthgamage, Kumara Welgama and Pavithra Wanniarachchi were included in the May Day committee, but that they had backtracked later. These three members are loyalists of Mr. Rajapaksa.
In the meantime, an invitation has been extended formally to Mr. Rajapaksa to attend the Galle rally. But, he is to join hands with the rally being organised by the Joint Opposition .
ITAK to alienate other allies in May Day event
The Ilankai Tamil Arachu Katchchi (ITAK), the dominant party of the Tamil National Alliance (TNA), is to alienate its political allies at May Day events this time. The party is to have its event in Jaffna. The TNA is an amalgam of four parties; the ITAK, to which TNA leader R. Sampanthan belongs, is the main one. According to sources from the North, ITAK is keen to distance itself from electoral allies as much as possible even at the next local authorities’ election.
