The Legacy of Hon Philip Gunawardena
Posted on January 10th, 2012

By Garvin Karunaratne, former SLAS

It was a very sad day in 1959 when the phones buzzed with the news that our Leader Hon Philip Gunawardena had left the Cabinet.
We  officers were all lost. We all had high hopes of creating a revolution in agricultural production. All hopes were dashed. But gradually it dawned on us  that though our Leader had left, he had created and left behind for us the framework development infrastructure that was required for us to get activated.  We had only to continue to work for the Common Masses instead of mourning.
Minister Hon Philip Gunawardena  had within a short space of three years provided a development infrastructure for the country’s future in agriculture  and commenced implementing it with a tremendous force. He created the Department of Agrarian Services from scratch. We recruited officers, rented out premises, got down to make lists of cultivators and landlords, demarcated cultivation committee areas and held democratic elections, all done in months- not in years. This was also  in the teeth of opposition from landlords. We worked undeterred despite threats of all types
Though the Ministers that took charge of agriculture and cooperatives after 1959, were not interested, fought shy of the people and never appeared on platforms to rouse the peoples’ enthusiasm, we continued the work heedless. The Commissioners were very enthusiastic throughout.  Commissioner M.S.Perera’s place was taken by J.V.Fonseka and we ploughed on regardless. Both of them were officers that had a vision for the country and were totally committed to development. The Nation came first and it was a worthwhile cause to have a battle for it.  That was our motto.
During the period of Prime Minister Sirimavo 1960-1965 and later under Prime Minister Mr Dudley Senanayake 1965-1970 and again under Prime Minister Sirimavo in 1970-1977, the Paddy Lands Act, The Peoples Bank, the Multipurpose Cooperatives and their Unions,  the Nationalised Bus Service, etc were all progressing in serving the people. Though at times the Ministers happened to be not interested in these, the Commissioners and the staff continued the task left behind by Hon Philip Gunawardena.
I happened to be in the thick of events after our Leader left. I was not alone. Almost everyone  in the Ministry were bold to continue to fight for the Masses and there were many other staff officers in other Departments and in non staff grades that were very enthusiastic.  Later when we were implementing progressive programmes of development we found support from many clerical officers. They were at times enlisted- all of them were activised by socialist leaders like Hon. Philip Gunawardena. In my work at Matara, as the Government Agent,  many a Clerical Officer was posted to act as Staff Officers and all of them acquitted themselves admirably.
I was actually implementing the Paddy Lands Act in the Matara District and also functioning in charge of the Marketing Department in the Southern Province when our Leader left.  The cultivation committees were established and we got cracking. I was transferred to the Kegalla District in 1960. I succeeded the late Indraratna Ediriweera, one of our stalwarts who had set up the cultivation committees. He was a strong man and did not mince words. Anyone against progress was summoned- be it an officer or a member of the public  and summarily told to fall in line. That was our forte. The Cultivation Committees were very active and  we got down to have mass programmes where we concentrated on the use of high yielding varieties, transplanting with the full support of the masses. Irrigation works were repaired apace and paddy cultivation did boom as never before. The cultivation season was marked with mass episodes of people transplanting, while singing goyam kavi. Our days were packed with  participating in such endless developmental exploits.
In a years’ time I was moved to Head Office in charge of fertilizer distribution and the next year I was moved to Anuradhapura to implement the Paddy Lands Act.  That was the District that had an acreage of 115,000 acres- easily double the acreage in most other districts and I had  two other Assistant Commissioners TG Peris and Sappie Pieris, ten Divisional Officers and a staff of over fifty overseers. When minor irrigation was taken over from the Government Agent we had 38 village cultivation officers and two Cultivation Superintendents. It was a vast staff. We got down to demarcate cultivation committee areas and conducted publicity closely emulating our lost Leader , Hon Philip Gunawardena.  He had given us a massive budget in his time and his successors were automatically compelled  to equal it. We were not short of funds and we moved really fast. We whipped up the enthusiasm of the cultivators and they would turn up in full force to listen to our orations that lasted hours. In earlier Districts where we held elections,   in the meetings and in action I found the people polarized along political party lines and this was inimical for development.  Political rivalry was evident in discussions and many a time spilled over into action. An anicut built at great cost was by night  damaged wantonly by the opposition and this had to be stopped if the Nation was to go ahead. Through allowing everyone to speak we created a situation for consensus in the elections for the cultivation committees and my instructions were that if the Divisional Officers failed to get at consensus, then I would be there for the next meeting. When the Divisional Officers failed I attended the next meeting and after I had held the floor  for two to three hours we achieved a consensus.  All three hundred cultivation committees were elected through consensus. We finally got down to a programme of management in paddy cultivation and repairs to irrigation work that was never known earlier. Earlier it was contractors that did the work. Now it was the cultivation committees that did the work and in the process community leaders from among the farmers gained the ability to get down to attend to development tasks The leading officials in the committee became efficient in managing their own development tasks. In my own words, “the philosophy of bringing about development has also to enable the people  to be contributive partners in National Production.”(From: How the IMF Ruined Sri Lanka)We were implementing Hon.Philip Gunawardena.s idea of Power to the People.  That was in 1962 to 1964, when the Paddy Lands Act brought bountiful crops to farmers in many districts.
In many areas the Cultivation Committees were a success and this resulted in increased production. There were problems in Districts like Colombo where the cultivators refused to pay up the acre tax in cash. Earlier the Vel Vidanes had collected it in paddy and some Vel Vidanes were well to do people in the villages who were not keen on exacting payment.
However  over the next decade,  the lack of enthusiasm in the Government especially after the Free Market Experiment in the Economy after 1977 saw the decadence of the Paddy Lands Act. Even earlier  the lack of interest by Ministers in charge had led to changes. Eviction inquiries that had hitherto been done by Assistant Commissioners was given over to Tribunals with retired Legal Officers, which made it difficult for cultivators to get redress.  The registration of tenants was neglected. Instead of representatives of the farmers political henchmen were selected. In the words of my colleague I.K. Weerawardena, once Commissioner of Agrarian Services, “Today(2008) the Tribunals are non existent, the farmers organizations are dead, the officers rarely visit the farming areas. The Agricultural Service Centers set up later by Minister Kobbekaduwa  are no longer a dynamic force. An attempt was made later to transform paddy lands  by trying to give ownership of lands to tenants, completely ignoring the  socio cultural background of agriculture in this country. All these experiments have resulted in the once vibrant paddy Lands Act started by Hon Philip Gunawardena ending up as an ineffective piece of legislation.(“Fifty Years of the Paddy Lands Act: The Island 22/8/2008)
In working any development programme  changes have to be made and though in the Sixties the Paddy Lands Act was administered by the officials with vehemence and with benefits both to the farmers in terms of increased incomes and to the country in bountiful harvests, the lack of vision among new politicians saw to the Paddy Lands Act ending in the dust.
The Multipurpose Cooperative Movement of Hon Philip Gunawardena  saw its heyday after his departure. The multipurpose cooperatives in the village areas attended to provide all requisites for paddy cultivation- fertilizer, pesticides and also collected paddy under the Guaranteed Price Scheme. These cooperatives with the guidance and support of the Union at the Divisional level played  a cardinal and important role in handling the commercial aspects of the farmers. The Handloom industry  also was helped by the Coop Union in obtaining yarn, its distribution and handling the sale of handloom products.
The Multipurpose Cooperatives and the Unions were used by us officials when ever we got the chance.
In Kegalla, as the Additional Government Agent we got down  to a special  programme of shramadana- voluntary work where we built roads, neglected irrigation canals etc. all done with the people in charge of the management.   Hundreds of people turned up. We had no funds to buy cement and iron needed to put up culverts and we even devised an ingenious method  by using Aid received from the Food Aid UN Programmes. They gave tinned fish, flour  etc. to be issued to the people that worked. We did not have to use these because well to do people in the area donated lunch and refreshments. People readily donated the tinned fish and the flour  they got. I got the Multipurpose Unions to provide the cement  and iron that was required and get paid in kind- the tinned fish, flour etc which they would sell and get reimbursed.  This was a great arrangement and many rural infrastructure works were done with voluntary work by the people. If not for the Unions of Multipurpoose Cooperatives this would not have been possible.
Later when I was the Government Agent at Matara, the Multipurpose Cooperative Unions were used to implement the commercial activities of the Divisional Development Councils Programme.  The Divisional Development Councils comprised all officials in the public service and the office bearers of village level institutions like the multipurpose cooperative, the rural development society , the cultivation committee. That Council could not handle finance and commerce. The Unions of Multipurpose Cooperatives marched into this gap and were enlisted to handle the production and marketing of production.  The Unions had funds, had lorries and officials and their services were readily available. The Chairmen of the Unions were experienced community leaders and were very keen on the development of their areas.
The Unions handled  the small industries in their initial stages till they got established when separate cooperatives were established. Even then the small industrial cooperatives had to lean on the Union for support.
The Deniyaya Coop Crayon, the showpiece of the Divisional Development Councils industries that produced a tenth of the crayons required for our country during 1972 to 1977 would not have started if not for the Multipurpose Cooperative Union at Deniyaya.  In our attempt to attend to establish import substitution type of  industries with the twin aims of creating employment for our youth and simultaneously saving foreign exchange, led by the Planning Officer,  Vetus Fernando, a chemistry graduate, using the science laboratory at Rahula College  Matara for experiments,  established how crayons can be made. Once this was finalized we had to find the funds for the project. The DDC Programme would not entertain import substitution industries and we were acting entirely on our own.  It was the maverick Sumanapala Dahanayake the Member of Parliament of Deniyaya who was also the President of the Multipurpose Coop Union at Deniyaya that took on the mantle of furthering this industry using the Coop Union. I covered his action by granting approval in my capacity as Deputy Commissioner of Cooperative Development, though I was not expected to function in establishing new industries. Both Sumanapala and I bent rules where the Nation’s interest  was concerned.  The equipment was purchased with funds from the Union, youths were enlisted and production began in earnest and working night and day, in a month we produced a store full of crayons. The Coop Union also handled marketing islandwide and all this was possible because of the Cooperative Union and its efficient management under Sumanapala Dahanayake. 
The above is only one instance where the Coop Union took on the mantle of development. If not for the Multipurpose Coop  and the Union of Coops at the Divisional Level- this development would not have been possible.
The idea of having a bank belonging to the people was mooted by Hon Philip Gunawardena as a part of his foray into agriculture.  His ideas came to fruit under Minister Illangaratne in the  establishment  of the Peoples Bank in 1961. This development also paid back to the country in heavy dividends when in the post 1977 period the IMF made inroads to control our finances.  In my words: Every provision of the Structural Adjustment Programme of the IMF enables the transfer of riches from the Third World to the Developed World. A significant method is to allow banks from Developed Countries to trade in the Third World. The profits go to the shareholders in the Developed Country”¦.. Another  very effective method is Devaluation”¦(From: How the IMF Ruined Sri Lanka, Godages)  It was the Peoples Bank and the Bank of Ceylon that was the bulwark against IMF domination  in our finances.
If not for the cumulative force of the two State banks- the Bank of Ceylon and the Peoples Bank, the rupee would have been severely devalued today.  The IMF has repeatedly called on the Government to privatize these two State Banks but the Government has so far withstood this demand.  Under the free market economic system that has been imposed on the Third World by the IMF it is the foreign banks that call the shots. In 2001, immediately after the free float of the Rupee the two State banks did not have the funds to pay a large oil bill and wanted foreign exchange collected by a foreign bank in Sri Lanka, when the price of the foreign exchange was increased by the foreign bank. After  the free float all banks collect deposits of foreign exchange and disburse them fixing their own rates of exchange. This resulted in the Rupee being devalued from Rs 85 to Rs 106 to the dollar.(From:How Sri Lanka was Ruines by the IMF). This is a forgotten episode today because we yet pay namaskar to the IMF. 
Hon Philip Gunawardena was keen on nationalization as opposed to the Private Sector. The essential difference is that in nationalized ventures the motive is service to the people while in the Private Sector the motive is to create profits for the owners and shareholders.  The nationalization  of the bus service paid in dividends to the commuters till it was totally destroyed by the UNP Government of 1977.
Later on as the Minister of Industries he created the Industrial Development Board, with the aim of creating and guiding industrial development.
Many are the Lessons to be learned from the ideas of Hon Philip Gunawardena.
Firstly the farmers in paddy cultivation are today having to act in a vacuum at the village level. The cultivation committees of the Paddy lands Act are now defunct and its place is filled by a Niyamaka who actually knows no agriculture. This task can better be achieved by an institution- a group of elected farmers.  It will only be then that people will participate actively in the management of paddy cultivation.
It is necessary that the Niyamakas are provided with a knowledge of paddy farming. This can easily be done in a weeks’ course done on a mobile training basis.  The necessity for a vibrant farmer’s organization and firm control over the management paddy cultivation is evident when one realizes that the Kanna Meetings of farmers where decisions like when to cultivate, when to put up fences, when to sow, when to harvest etc are made are either non existent today or when they decide people do not follow them. Paddy cultivation depends on the rain and today everywhere in the country people do not adhere to the rain pattern. The Kanna Meetings provided for this. This  non adherence leads to people cultivating late resulting in pest attack and further it means that the harvest is damaged by the rains. Then they shout out that the rains destroyed the crop when it is due to late cultivation. In the Sixties and earlier the Kanna Meetings were strictly adhered to.
It will also be ideal for all activities dealing with paddy farming to be brought under a single Ministry.
A rejuvenation of the Multipurpose Cooperatives and the Coop Unions is a must in any rural development. The experienced community leaders who have learned how to manage commercial establishments are in these Unions. They can easily be activated to establish import substitution type of industries like the Coop Crayon of Deniyaya which will bring employment and income to rural youth and simultaneously  help our foreign exchange. The Industrial Development Board established by Hon Philip Gunawardena should be  decentralized to the Districts and also made to provide the feasibility reports to make items that are currently imported. That will provide the chance for the Coop Unions to establish cooperative industries with the full participation of the people.
In the task of  stopping the malaise of inflation the Marketing Department mechanism had better get re activated. For instance , in the Fifties when there was a shortage of eggs it was the Marketing Department that purchased eggs from producers till the industry got on its feet.  The Marketing Department method of buying at the Village Fairs and selling in retail units in the Cities, the system that worked to perfection under Hon Philip Gunawardena, is the only way ahead. Lak Sathosa handles what is imported and should be expanded. LakSathosa and the Marketing Department can effectively control inflation.
Hon Philip Gunawardena’s ideas are so relevant to today’s economic ills and will immensely benefit the Common Man and deserves to be considered by the present Government. The achievement of peace by the defeat of the ruthless monster Prabhakaran is a great achievement, a feather in the cap of President Rajapaksa. This victory has to be adorned with ushering in the prosperity of the masses for which the ideas left by Hon Philip Gunawardena will definitely be useful.
Garvin Karunaratne
January 9, 2012
Author of: How the IMF Ruined Sri Lanka, Godages,
            Success in Development, Godages

12 Responses to “The Legacy of Hon Philip Gunawardena”

  1. Dilrook Says:

    Dr Gavin Karunatarna

    Quoted: Hon Philip Gunawardena was keen on nationalization as opposed to the Private Sector. The essential difference is that in nationalized ventures the motive is service to the people while in the Private Sector the motive is to create profits for the owners and shareholders. The nationalization of the bus service paid in dividends to the commuters till it was totally destroyed by the UNP Government of 1977.

    Nationalization as opposed to the profit motive was and still is a disaster. CTB didn’t pay any dividends to the commuters and the taxpayers collectively. It destroyed their money. Ultimately taxpayers bailed out the CTB every year. This led to a situation where loss making was tolerated making bigger losses every year.

    State should do business but with the profit motive. If CTB operated to earn profits it would not have been a burden to the state and the people. Even a remote area can have a CTB bus earning sufficient profit if run profitably or at least to avoid loss.

    The problem is state running to make loss and only the private sector running to make profit. Any state loss should be paid for by the people eventually. State cannot ‘absorb’ or hide losses.

    If supporters of state business activity only want social service and oppose profit, and if private sector only wants profits not social service, then we are not going anywhere. Business is about providing needs and wants in the society profitably. So all businesses do social service to an extent. Additional provisions is charity.

    A compromise between the two extremes would be for the state to compete with the private sector profitably. Not everyone can be made happy politically or economically.

    CTB, Paddy Marketing Board, Sathosa, Building Materials Corp. and many others have tremendous potential to run at a profit today. The profit goes to the people. Without that there is no way to control inflation.

    On the other hand if they run at loss, more taxes have to be imposed to recover the loss again driving inflation up.

  2. Fran Diaz Says:

    Another aspect the taxpayer wants to see is that tax rupees are spent wisely. For instance, school curricula could be re-vamped to suit the job market and social needs, among other subjects taught as a rule. Pare down/remove unnecessary subjects. Same can be said for Universities in Sri Lanka.
    None of the -isms (socialism, capitalism, communism) have proved to work in their pure forms anywhere in the world. A balance of socialism & capitalism (small or medium size ventures) may be best for Lanka.

  3. Dham Says:

    The statement, “The nationalization of the bus service paid in dividends to the commuters till it was totally destroyed by the UNP Government of 1977.” is partially true. But before it was fully destroyed in 1977, it was gradually being destroyed due to stupid politicians giving jobs in CTB to their supporters. Any one could become a checker. There were 30 employees per bus. Our every going on “Political problem” was the reason why CTB after being one of the best institution in the world ultimately got destroyed.
    But If properly run honestly I want it back in Sri Lanka. You cannot find any other service in the whole world. There was a bus going to every corner of the country at a specified time. Where can you find such a service ?

  4. Christie Says:

    The Ceylon Transport Board is the best example a job well done by the lumpeniniebougesie (parippuwas). They nationalised tbus services operated by Sinhalese owners (buskarayo) and destoyed the only sinhala enterprenuers that were coming up to challenge the established colonial parasites’ business world.

    The department of Revenue which was dominated by the colonial parasites tried to destroy the baskarayo by takin Pushpauyana Omnibus Co to the House of Lords alledging that they did not pay tax propbashing.erly during the time of Raj and Rani. It survived but succumbed to the parippuwas.

    Parippuwas did not nationalise a single business run by Tamils and other Indians. can someone show me un.

  5. Fran Diaz Says:

    State institutions becoming ’employment agencies’ for the politicos is the bane of state enterprise. Dilrook is right – state enterprises must be made to compete with private enterprises. Otherwise, tax payer Rs. get wasted.

  6. Dham Says:

    Let me name just one name. SDeS Jayasinghe

    OK. Now tell me whether this person is a Buskaraya or Parippuwa.
    You talk like know everything , but you are an eelamist or a real parippuwa.

  7. Christie Says:

    Who ever he is he got a Sinhala surname. If he was a baskaraya before the CTB he was not one after CTB as his buses would have been nationalised. If he was a Socialist in the island he definitely is a parippuwa.

    I dont know everything. Most of things I put on are friends, ideas.

    Can the writer of this article tell us of any one employed in Phillip’s Ministries from his electorate in a reasonable position. He never gave a proper position to any of poor constituents. The parippuwas theory, keep them poor and they will always vote us.

  8. Dham Says:

    S De S jayasinghe was a UNP minister, if not a duputy. He was always a UNpier.
    His family, however,owned one of the bus companies.

    CTB, Samupakara were modern and great ideas. Philip was a selflessly generous man who spent his own money to do politics for the sake of the country.

    Defeated eelamist can say any thing and dream of Ceylon until their death. Keep on writing nonsense comments but have no balls to write an article with own ideas and truth.

  9. Dilrook Says:


    Quote: You cannot find any other service in the whole world. There was a bus going to every corner of the country at a specified time. Where can you find such a service ?

    That shows what a stupid system it was. Otherwise many others would have copied it (other than bankrupt communist economies).

    Primary focus on social service leads to disaster.
    Only focus on profit also leads to danger.
    What is needed is to meet social needs profitably. This compromise is essential. Survival of organisations is the most important thing. For that they must earn profits. Leave charity to NGOs. Doing charity with taxpayer money is a crime.

    Certain routes are unprofitable for CTB. Reduce running on those routes. A very small percentage of people will be affected. That is all right. Otherwise the entire country will have to foot the bill. If the number of runs is reduced to remain profitable, affected people will find their own transport at other times. It generates money for the rural economy/operators. Once it develops CTB buses could run many trips.

    Take the case of Suntec solar panels in 1980s. CEB was unable to provide electricity profitably to some villages. So people bought and installed Suntec solar panels. But then CEB stretched to these areas despite unprofitable operation and what happened? The solar panel use totally collapsed.

    CTB was doing social service when it employed 30 persons per bus! Social service by customers and social service by employees. It is a wrong approach altogether that destroyed the economy. What is needed is to meet social needs profitably. Taxing 100% of the population to benefit 10% who would otherwise not have a CTB bus running more than 3 times a day is so unwise.

    We shouldn’t expect social service from taxpayer money.

    State must do business competing with the private sector with out the social service approach. That still has huge benefits. Controlling inflation, a more ethical operation, a more equitable distribution of employment, profit, a source of income for the state and many more benefits. If the social service approach is taken, all this will be lost and taxpayers will be further taxed to sustain a useless charity.

  10. Dilrook Says:

    What Christie says has some truth.

    Nationalising bus companies owned by foreigners is a good move. But nationalising what was owned by locals was a disastrous decision. Had the local operators been allowed to grow, for 21 years from 1956 to 1977 they would have grown to a profitable industry employing tens of thousands and no burden on taxpayers. Anyhow the best approach is for the state to compete with the private sector profitably.

  11. Christie Says:

    Samupakara started before the independence of the country.

    Bus mudalalis were the only significant Sinhala businesses in Ceylon (Sri Lanka) before the nationalisation. SWRD and the Socialist gang did not nationalise any of the import expot businesses of Indians’ and Tamils’ the colonial parasites of Sri Lanka. Let me tell a true story. There were bus mudalais who had only one bus and came from poor villges. A driver from Maliboda a village past Deraniyagala had a bus. If I am right Deraniyagala is a town in Ruwanwella seat, represented by our greatest Socialist Dr N M Perera. The driver (busmudalali) and his bus conductor lost their means of living. The CTB busses did not go to Maliboda but only to Deraniyagala as the staff were from Deraniyagala and the busses had to be parked in a safe place. So after CTB busses in some cases did not go to far away villages.


    To call Ceylon Sri Lanka was a a part of the conspiracy of the colonial parasites who financed SWRD and the Socialist gang TO FORM THE ‘SRI LANKA’ FREEDOM PARTY AND FORMULATE THE POLICIES WHICH DESTROYED THE SINHALESE.

  12. Dham Says:

    “CTB was doing social service when it employed 30 persons per bus! Social service by customers and social service by employees. It is a wrong approach altogether that destroyed the economy.”
    I agree 80%, 20% because 25 persons were political pandamas. I didn’t approe that.
    But before this crowding of panadams to CTB, it was a very well organised, managed , cantral service to public which was also profitable. I believe bus services should be a service more than a purely profitable corporation because it brings efficiency, productivity inot the economy intangibly.
    Look at what happened after 1977. It is a mess impossible to sort out. Stupid little busses waiting 10 minutes every bus stop and crawling slowly to the next killing valuable time.
    Look at SBS ( Singapore bus service ) for example. It was not as good as CTB. But it was run as a government sponsored coproation, even now. There is government control even now. profitable with a modern bus fleet.
    When 30 people worked we had to import low quality busses from India with a bell attached to string technology.
    This is political problem we are facing.

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