While government leaders and so-called financial experts continue to boast about Sri Lanka’s high growth rate or per capita income and while multi-million rupee beautification projects are continuing, our sister paper the Sunday Times yesterday revealed a shocking and dangerous truth about the economy.
A top government official who did not wish to be identified for obvious reasons said the deepening budget deficit crisis would leave the Rajapaksa regime with no option but to implement tough austerity measures including new taxes on various items and the withdrawal or reduction of subsidies given mainly to millions of poor people such as farmers and fisherfolk.
He said debt servicing cost had gone up by three per cent more than state revenue. Sri Lanka’s export earnings had declined drastically and the revenue had come down by three percent to Rs. 509.4 billion while expenditure had increased by 3.3 per cent to Rs. 861.6 billion during the first half of this year compared to statistics last year, according to Finance Ministry data.
He said if the new measures were not imposed, the Treasury would be forced to go for more borrowings to cover government expenditure which would then lead to more debt servicing.
" According to the report the Treasury is considering direct and indirect tax increases on commodities and services under a periodical tax revision system as it has decided to stop short cut methods and go for hard austerity measures "
According to the report the Treasury is considering direct and indirect tax increases on commodities and services under a periodical tax revision system as it has decided to stop short cut methods and go for hard austerity measures.
While white lies, damn lies, statistics and deceptive talk about becoming the hub or miracle of Asia have been exposed, we wish to emphasise today that if austerity is the answer to Lanka’s economic crisis, then it must begin at the top. Government leaders, Ministers and MPs, members of provincial and local councils must set the example by giving up most of the extravagant privileges and luxuries they are indulging in at public expense. The economic package will work only if the political leaders or indeed all politicians from top to bottom and others including religious and social leaders enter into the hallowed, time honoured concept of simple and humble lifestyle.
Despites statistics to the contrary by officials of the Central Bank, the Treasury and others, practical realities show that millions of Sri Lankan people are struggling for existence on or bellow the poverty line. The hard-working farmers-- once the heart of our economy and our very civilisation itself--have been dumped into mudholes and if the few subsidies given to them are reduced or withdrawn, history will record that this regime instead of turning the famers into kings has turned them into beggars. The same is true for other hard-working people such as fisherfolk who in recent years have found it difficult even to provide three square meals for their families though they risk their lives and toil in the night unlike political leaders who do little but get or plunder hundreds of millions of rupees from public resources and store them up in their big barns.
We insist again let there be austerity but let it begin with the leaders who must set the example so that the people will follow and Sri Lanka could be put on a different track to sustainable development with equality and social justice.