{"id":109350,"date":"2020-12-04T15:50:16","date_gmt":"2020-12-04T22:50:16","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=109350"},"modified":"2020-12-04T15:50:16","modified_gmt":"2020-12-04T22:50:16","slug":"jvps-myopic-budget-criticisms-trashed","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2020\/12\/04\/jvps-myopic-budget-criticisms-trashed\/","title":{"rendered":"JVP\u2019s myopic Budget criticisms trashed"},"content":{"rendered":"

By : A.A.M.NIZAM – MATARA<\/strong><\/em><\/span><\/h2>\n\n\n

It was hilarious to find that\nthe alleged ex-Gono-Billa and now the leader of UNP\/SHB dhobi clan JVP, Anura\nKuimara Dissanayake, who and his cohorts remained as that they are deaf, dumb\nand blind when the Sirisena\/Ranil government increased VAT and taxes between\nthe period 2015 to 2019, deprived people when their rights and dues and were\nalways in the forefront to justify and protect adverse economic, social and\nother measures taken by that government have requested the government to\npresent an amended budget saying that new Ministries have been established\nafter the 2021 budget was presented.  <\/p>\n\n\n\n

It is very strange to note\nthat they never made such demands every time Sirisena periodically and on a\nplethora of times changed Ministers on the request of Ranil Wickremasinghe and\nnumber of times. <\/p>\n\n\n\n

JVP leader Anura Kumara\nDissanayake called on the government to submit an amended budget to Parliament\nbecause three new ministrieshave been set up after the presentation of Budget\n2021.<\/p>\n\n\n\n

 Participating in the\ncommittee stage debate of the budget, this alleged ex-Gonibilla said a budget\nwas presented to this House and it is being debated at the committee stage.\nAfter the tabling of the budget proposals some new ministries have been set up\nand now debates are going on without allocations for those ministries.\nAllocations have been made for statutory bodies that would come under those\nministries but how could those ministries function without funds he has asked?\nHe has asked the government to submit an amended budget before the end of the\ncurrent budget debate. <\/p>\n\n\n\n

Leader of the House, and\nForeign Minister Dinesh Gunawardena countering the JVP leader said that\nDissanayake raised similar questions with regard to the representation of the\nPresident\u2019s vote in Parliament and the Prime Minister would represent the\nPresident in the House and give answers on behalf of the President. He said\nthat most of those expenditure heads belonging to the institutions which would\nbe placed under the new ministries, have been already discussed and if` a need\narises the government would introduce changes on the last day and affirmed that\nhe does not see there is issue in this matter.<\/p>\n\n\n\n

Meanwhile, the Dhobi clan\nJVP\u2019s Nationalist nominee Kumar David who is one of the coterie gang that\nbetrayed the LSSP for personal gains despite the fact that party was a\nformidable party in the past which got members elected from Balapitiya to\nColombo South throughout coastal belt and majority of seats in the Kegalle\ndistrict writing to the anti Sri Lankan website Colombo Telegraph published\nfrom London in an article titled Budget and the Virus\u201d said that the first wave of the pandemic from mid-March to\nend-May was handled successfully and it seemed we had put it behind us. This\npseudo Marxist Tamil chauvinist blamed the government for placing the Army\nCommander in charge of the Task Force; (he has a personal enmity with security\nforces big wigs for their crushing of Tamil terrorism) and said that it is not\npossible to give a virus marching orders and expect it to disappear into the\ntwilight.<\/p>\n\n\n\n

In a mean attempt to create friction within the smooth\nrunning government this Tamil chauvinist blamed President Gotabhaya Rajapaksa\nfor not appointing Dr. Tissa Vitharana to lead the Task Force, and attributed\nit may be because his proclivity to use a military approach to all things. <\/p>\n\n\n\n

Delving on economics David said that except for NM\u2019s\nshort stint as Finance Minister when the economy was salvaged to a degree every\npost-independence govt. has screwed the economy and pushed Lanka ever deeper\ninto debt. He admittedly said the 2005-2015 government was corrupt to the core\nand sank Sri Lanka into a huge hole of indebtedness so as to execute prestige\nprojects since they were avenues for daylight robbery. But let\u2019s be generous\nand say GR is not to blame for that.<\/p>\n\n\n\n

So, a fair critique of the 2021-Budget should\nbe premised on accepting the debts the country faces. The GR regime should be\nfaulted not for this but for grossly bad decisions in the budget itself. Two\nare glaring; the huge amount set aside for Highways and the continuing massive\nallocation for the military. Highways is the mulch cow that corrupt politicos\nand the clan used from 2005 to 2015 to siphon off millions and billions,\nrespectively. He claims the swollen military budget is to keep the yakos<\/em> in line. <\/p>\n\n\n\n

David states that he is of the view that\nfiscal deficits and economic stimulus is unavoidable and Sri Lanka is headed\nfor an unavoidable and deepening debt crisis; these are unusual times. However,\nif those making policy are incompetent \u2013 no more experienced in planning,\npolicy and theory than Caabral \u2013 then one cannot expect anything better than\nthe budget on the table. Contrast the top-notch team of liberal economists that\nBiden has put together. On Sundays 22 and 29 November he says liberalism as\ninadequate to America\u2019s problems, and but that\u2019s a different matter.  <\/strong><\/p>\n\n\n\n

People\nCentric economic revival<\/strong><\/p>\n\n\n\n

Speaking at the Sri Lanka Economic Summit\n\u2018Roadmap for Takeoff: Driving a People-Centric Economic Revival\u2019 organised by\nthe Ceylon Chamber of Commerce (CCC) the Prime Minister Mr. Mahinda Rajapaksa\nrecapped the efforts made by the Government to support the private sector\nduring a difficult year. He emphasized Sri Lanka needs to return to work as\nsoon as possible and said the Government stands ready to provide the requisite\nsupport. <\/p>\n\n\n\n

The PM said that\neconomic and growth challenges need to be jointly managed by the private and\npublic sectors to move Sri Lanka beyond COVID-19 impact and towards\npeople-centric development.. 
\n
\nHe said We stand ready to utilize new and innovative measures to revitalize\ngrowth in Sri Lanka and the next few years will be decisive ones for Sri Lanka\nand to strengthen the economy the public and private secretory will have to\njointly manage growth challenges,\u201d he told the virtual gathering. PM Rajapaksa\nsaid it was an accepted fact that Sri Lanka had managed its COVID-19 challenges\nfar better than many other countries around the world and provided support to\nkeep the economy ticking over. <\/p>\n\n\n\n

However, the time\nhas now arrived to move to the next phase of turning around growth and\npreparing for an economic take-off and in order to achieve that the business\ncommunity and other stakeholders will have to intensify efforts and make use of\nthe policy framework provided by Budget 2021. <\/p>\n\n\n\n

He said We are\nsatisfied with the initial response to COVID-19 but now greater things have to\nbe achieved on this foundation. This entire country has to be converted into\none hive of activity and we appreciate that is also the intention of this Chamber.\nFor this task, corporate and private sector leaders have to come together to\nplan, exchange information and implement policies.\u201d 
\n
\nSpeaking further the Prime Minister pointed out even though remittances and\nexports have proved resilient, the Government could not be satisfied with the\nlevel of foreign direct investment and advocated that the private sector should\nalso work towards attracting more investment. 
\n
\nHe told the Private Sector We will support you unreservedly in this effort and\ninvite you to lift up our economy once again.\u201d He added that the Government\nexpected the private sector to support completion of 289 stalled projects worth\nRs. 5 trillion as well as improve Sri Lanka\u2019s food security. <\/p>\n\n\n\n

PM Rajapaksa\nopined that despite the multitude of challenges faced by his Government, they\nhad stepped up and delivered. He called on the private sector to do the same\nand take Sri Lanka towards an economic rejuvenation, <\/p>\n\n\n\n

COMMENTS\n<\/h2>\n\n\n\n

Addressing  Key insights at Bartleet Religare\nSecurities webinar titled \u2018Navigating the Paradigm Shift\u2019<\/strong> State\nMinister Ajith Nivard Cabraal explained the Government is keen to hold interest\nrates steady at current levels for at least two years, and this would be given\npriority alongside strengthening our rate of exchange. He said that with\nBudget 2021 well into the second half of its journey through Parliament \u2013 a\nmere formality for this house \u2013 the Government had opportunity to provide\nfurther clarity to some of the proposals it listed last week, whilst the private\nsector too had a chance to delve deeper. <\/p>\n\n\n\n


\nIf interest rates show any tendency of rising, we are ready curtail some\npublic sector investment at that time to maintain rates at the levels we want\nto see and the Government does not want to get them to any condition to\njeopardize the macro fundamentals, he said. <\/p>\n\n\n\n


\nThe State Minister responded to a number of questions posed on Budget 2021, and\none of them dealt with the downgrade afforded to Sri Lanka by Moody\u2019s Rating\nAgency, who stated it does not expect the budget to provide a meaningful boost\nto outputs and instead enhance fiscal pressure.
\n
\nIn response, the Minister said: Moody\u2019s jumped the gun and they brought in\nthat downgrade of two notches well before the Budget could come in, now they\nare stuck with it. Whatever we put in the budget as credit positive they need\nto find a loophole to say that\u2019s not a good thing. So, I think that is what is\nhappening now. The nice thing about it is that investors have not followed\nMoody\u2019s. The first day that Moody\u2019s downgraded investors got a little upset.\nThen our bonds started having very high yields. But very soon, once they dived\ninto the Sri Lankan credit and examined it carefully, they found that Moody\u2019s\nstatement was not with position. Now they have all begun to tighten much\nfurther and today\u2019s Moody\u2019s reaction. <\/p>\n\n\n\n

State Minister\nCabraal also stated he held discussions with several large international\ninvestors, and that Government is looking to persuade them to come to Sri\nLanka. We may see some movement next year,\u201d he added.<\/p>\n\n\n\n

I think the\ncurrent rates are very comfortable for all. The only thing I would like to see\ntighten is the exchange rate, it has gone beyond the comfortable range. If I\nwas the Governor of the Central Bank, I would say it wouldn\u2019t have gone to that\nextent. I would have been a lot more sensitive to it because I know the impact\nit has on debt and the impact on the Budget of having to allocate that much\nmore rupees to buy the same dollars. It is a big burden I would like to avoid.\nIt\u2019s a big ingredient of our debt sustainability. We will take the necessary\npolicy measures to encourage movement in that direction,\u201d Cabraal assured.<\/p>\n\n\n\n

Responding to\nfurther questions, the State Minister said the Government has no intention to\nlist State-owned enterprises on the Stock Exchange as privatization is not part\nof the Government\u2019s agenda. However, it could consider listing some of the\ninstruments of SOEs as long as they do not disturb this policy, he said. <\/p>\n\n\n\n

Once again, he\ninvited more companies to list debt on the stock exchange as seen in developed\nmarkets, noting this would bring stability to some organizations. We have\nthought outside the box and provided certain incentives, which are quite\ndifferent to what was offered earlier,\u201d and this should boost further listings\non the stock exchange he said. <\/p>\n\n\n\n

Speaking further\nMr. Cabral said that the Government has mooted a Budget monitoring process\nunder his ministry to keep a close tab consistently on implementation of\nproposals,. He said that the Government will bear the cost of the additional\nRs. 2 provided for remittances of workers overseas, and provisions have already\nbeen made for this in the Budget. The new Special Goods and Services Tax on\nexcise items will be announced before the finalization of the Budget and noted that\nthe question for motor vehicles will not arise in the near future.<\/p>\n\n\n\n

Tax\nadministration will be improved and the 0.25 of taxation on turnover of\ncompanies will be helpful towards revenue enhancement, Cabraal said, alongside\nnew features like the 1% tax on undisclosed income coming into the tax net.\nWith excise, the Government will introduce new methodology that have been\nproven all over the world and derive greater amount of revenue \u2013 almost an\nadditional Rs. 40 billion the Government estimates. Leakages that have been\nthere will be plugged very well and we can have those revenue targets achieved\u201d\nhe asserted.<\/p>\n\n\n\n

We have not said\nwe are not going to ask questions. We have said you can bring the money. We\nhave said you can bring the money you have not declared, and that does not mean\nit\u2019s tainted. There can be instances where people have sold land and not\nmentioned the full value. Some countries have no taxes at all, but that does\nnot mean it encourages money laundering. There is no danger of this going into\na FATF question mark,\u201d Cabraal noted. <\/p>\n\n\n\n

He also stressed\nthe need to reduce construction costs in Sri Lanka as it is amongst the highest\nin the world. The government is looking at a composite evaluation, which for\ninstance will bring down the cost of cement, as raw material costs need to be\nmanaged. The Cess on imports of cement and clinker will be examined carefully\nto see how overall costs can be brought down. The Government is engaging cement\nmanufacturers; and is interested to note if they could guarantee entire local\nsupply from Sri Lankan resources.<\/p>\n\n\n\n

Cabral also\nstated that port activity has sufficient space for growth, and the country\nneeds more port related industries to come in. The new tyre factory coming in\nthe Hambantota industrial zone with Chinese investment is going to be a very\nimportant investment, and the State would like to see many more investments\nlike that coming in, he said, reiterating the Government is expecting some new\nventures to come in over the next few months. <\/p>\n\n\n\n

Joining the\ndiscussion was Krishan Balendra, Chairman of John Keells Holdings PLC, who also\npointed to tremendous growth in port activity and underscored Colombo\u2019s\nposition as a major transhipment hub making 80% of volumes. <\/p>\n\n\n\n

Balendra said\nthat if you have the adequate capacity in Colombo you can have growth in\nvolumes. We have the capacity for eight million TEUs. Colombo can handle more\ncapacity; it won\u2019t be over capacity. The need is to add capacity and then the\ndemand will be there,\u201d Balendra said. The proposed East Container Terminal is\nright next to John Keells\u2019 SAGT, and there is a lot of potential therein for\nboth, he added. <\/p>\n\n\n\n

Compared to the\nrest of the region, Sri Lanka has a lot of space to grow in almost every sphere\nthe group is already invested in, and our potential in every sector is immense,\nthe Chairman opined. In the short-term there may be over capacity, but as\nbusinesses and traffic numbers grow there will be demand for more services. It\nis in this content, JKH is looking at large integrated development like Cinnamon\nLife, he explained, pointing to tremendous potential for retail and\nentertainment sectors.
\n
\nBalendra said there would be no real change in terms of sector focus for JKH,\nadding the Cinnamon Life development will be completed well before the Port City\nis finished, with over 65% of apartments already sold. The Port City will help\nincrease development for property, he added. It is important to manage new\nsupply of hotel rooms to ensure people who have already invested to get\nreturns, he noted. <\/p>\n\n\n\n

HNB Managing\nDirector Jonathan Alles said Budget 2021 provides several interesting areas for\nthe banking sector with a lot of impetus to supporting SMEs, entrepreneurship\nand local production. The Minister alluded to renewable energy and this is a\nvital area we are looking to support,\u201d he added. The banking sector must not\nignore the fact it must continuously be available to support the requirements\nof the grass root sectors and make funds available,\u201d he stressed.
\n
\nExecution of the Budget becomes very important and that is where the value\naddition comes in. The cost of procrastination is billions to Government and\nthe private sector, Alles explained. He enthused at the Minster pointing to\nsignificant new foreign investments materializing over the course of next year,\nand Sri Lanka must keep telling its story and get these transactions off the\nground without just letting them be stories. 
\n
\nAlles however opined that normal economics suggest it would be difficult to\nhold interest rates down with domestic funds being used to bridge the deficit.\nInterest rates can also marginally move upwards if credit growth picks up.\nHaving said that rates are at unprecedented lows, so even if they inch up\nmarginally it would still be very affordable, he explained. 
\n
\nCredit growth could be moderate in the first half of 2021, and asset quality\nwill continue to be under pressure, and banks need to watch what entities are\nable to start repayments after the moratorium is over. The country needs\nconsistent taxation and it is hoped this would prevail over the coming years,\nAlles said. <\/p>\n\n\n\n

We expect the\nbanking sector tax to come down from 28% to 24%. The 0.25 insurance fund is not\ngoing to go down too well because it will have a significant impact on the\nbottom line. The risk weighted provisioning suspension; it has an impact on\nyour capital adequacy, but then some of us banks are more than adequately\ncapitalised. So, we would want a rating upgrade really, because currently we\nare impaired on account of LGD and likely to see some further impairments on\naccount of the downgrade of Moody\u2019s.<\/p>\n\n\n\n

Moratoriums are\ntaken as modifications as far as accounting is concerned and not as\nrescheduling which means you don\u2019t have to impair. Prudency would require banks\nto asses every customer and transaction, and whilst you have provided that\ncover is it fair and right for you to take cover under this and keep them under\nthe current bucket? In this light you will see the industry taking a position\nand then taking an estimate and identifying accounts that even post moratorium\nwill have certain challenges. You might see us staging them from 1 to 2, which\nwill then automatically entail a higher level of impairment which we have\nactually projected and forecasted. Those that we feel don\u2019t have a chance and\ndon\u2019t have ancillary, we might be compelled to move straight into\nnon-performing and start looking at full impairment and other courses of\naction. It will be based on individual clients,\u201d Alles stated. <\/p>\n\n\n\n

He praised the\nGovernment\u2019s initiative to encourage overseas workers to bring in money through\nofficial channels, as these then get recorded and the government can calculate\nand know these amounts coming in. This would be worth the Rs. 2 paid in the\nshort term, he opined, and it will help banks to leverage those individuals and\ndo business with those beneficiaries for those funds coming in, he said. <\/p>\n\n\n\n

To be\ncontinued\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

By : A.A.M.NIZAM – MATARA It was hilarious to find that the alleged ex-Gono-Billa and now the leader of UNP\/SHB dhobi clan JVP, Anura Kuimara Dissanayake, who and his cohorts remained as that they are deaf, dumb and blind when the Sirisena\/Ranil government increased VAT and taxes between the period 2015 to 2019, deprived people […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"class_list":["post-109350","post","type-post","status-publish","format-standard","hentry","category-aamnizam"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/109350","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=109350"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/109350\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=109350"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=109350"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=109350"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}