{"id":67698,"date":"2017-07-09T21:34:05","date_gmt":"2017-07-10T03:34:05","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=67698"},"modified":"2017-07-09T14:19:36","modified_gmt":"2017-07-09T21:19:36","slug":"yahapalana-and-the-economy-part-3","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2017\/07\/09\/yahapalana-and-the-economy-part-3\/","title":{"rendered":"YAHAPALANA\u00a0AND THE ECONOMY Part 3"},"content":{"rendered":"

KAMALIKA PIERIS<\/em><\/span><\/h2>\n

Yahapalana has put in place many measures to impoverish the public. This is a planned move to break the spirit of the nation. Welfare benefits have been removed.\u00a0\u00a0 Yahapalana has stopped the fertilizer subsidy, free school uniforms, elders and disabled benefits, observed Chandraprema.\u00a0\u00a0 Construction projects started by the earlier government have been stopped resulting in loss of jobs. Due to the stoppage of the Port city 5000 jobs were affected in 2016. In 2016, it was decided to extract rural people\u2019s savings by amalgamating cooperative and rural banks. There is now a move to tax EPF at an unprecedented 28%,\u00a0 14 % on EPF income and 14% withholding tax. Private sector workers were solely dependent on their EPF after retirement. \u00a0There is also a move to amalgamate EPF and ETF funds. Private pension schemes have also been proposed.<\/p>\n

Yahapalana supports the issuing of loans and expanding micro credit. It plans to entrench loans and financing in every aspect of people\u2019s daily lives, complained critics.\u00a0 Yahapalana has tightened up on loans. Yahapalana\u00a0\u00a0 plans to expand the draconian Debt Recoveries Act. The provision of giving loans to EPF members for housing projects was withdrawn by Ravi Karunanayake, Finance Minister, saying that the EPF members would get a depleted amount when they retire.\u00a0 Poor families which were given Rs 2,500 each to improve their houses by President Rajapakse have been ordered to repay the money. The money given to Samurdhi beneficiaries during the 2015 Presidential election of 2015 has been recalled. This was a loan said Yahapalana,\u00a0\u00a0 it must be repaid. Samurdhi funds have decreased and they have to recover this money.<\/p>\n

Yahapalana is crushing small enterprises in several ways. \u00a0Under the guise of social concern, school canteens and wayside caterers will be inspected by the Health Ministry. Reports will be called every two weeks from the wayside stalls which cater to bus passengers.\u00a0 Legal action will be taken under the relevant laws. The fine for long distance buses plying without valid permits has been increased from Rs.10,000\u00a0 to Rs.200,000.\u00a0 Mannar- Colombo luxury bus \u00a0was stopped for overloading and fined 30,000 in March 2017.\u00a0 The driver, conductor and passengers objected. Other buses also joined and the protest lasted over three hours. The driver told\u00a0 Derana television, \u00a0he\u00a0 is unable to work as a farmer, now. If\u00a0 \u2018 this is also stopped\u2019 what is he to do? The government must introduce more buses.<\/p>\n

Small businesses have been hit hard by the policies adopted by this government, said critics. Micro enterprises account for 91.8% of the total business establishments in the island and employ 44.6% of the total labor force.\u00a0 The tax on vehicles has made it difficult, if not impossible, for the small business man to buy a vehicle. The tax of Rs 1 million imposed on the import of vehicles, in 2017,\u00a0\u00a0 increased the duty threefold.\u00a0 The selling price of mini trucks jumped from Rs 1 million to around Rs 1.8 million. The loan-to-value\u00a0 ratio on a three-wheeler was capped at 25%, making the initial down payment jump from Rs 200,000 to Rs 485,000. Mini trucks and three-wheelers were among the worst hit. The purchase of mini trucks, crashed to 298 from around 1,400 units a month, and three-wheeler registrations crashed from around 6,000 a month to 900 in February 2017.<\/p>\n

Mini trucks and three-wheelers were mainly used by micro enterprises like small retail stores, garages and bakeries. The worst affected were micro enterprises of less than 5 people, observed Murtaza Jafferjee. It is they who use a basic utilitarian vehicle like a three-wheeler or mini truck. A baker who has access to a mobile retailing unit through a modified three-wheeler or mini truck enjoys much greater sales, carrying and displaying capacity is greater, radius of travel is 10 times more.\u00a0 The alternator can charge the battery that can power a fan or food warmer. A tradesman can fit out a truck as a mobile workshop permitting him to carry a larger range of tools, spares, material for the job, and power his electrical tools, he said. A farmer growing vegetables can carry his product to the wholesale market before spoilage. Making mini trucks unaffordable prevented these persons from rising economically. Also the individual who bought a truck before the budget was significantly better off than one who did not.<\/p>\n

The goal should be to increase the output of the butcher, the baker, the plumber, the shop keeper, the farmer. Even in the most advanced of economies,\u00a0\u00a0 the majority of the population is in low productivity manufacturing and service jobs, said an observer who seemed unaware of the real motive of Yahapalana\u00a0 Large businesses are provided with concessions and tax holidays in 2017 budget \u00a0but it has no help for farmers, fishermen and small enterprise owners, concluded Jafferjee.<\/p>\n

Government is offering financial support under Swashakthi, for startups, as part of the one million jobs programme. The offer is a \u00a0mere 2 lakhs at 5.5.% and an additional Rs 10,000. The businesses selected are small time domestic ones, fruit and vegetable procession, plant and nursery development,\u00a0 dairy, poultry, aquaculture, beauty culture, motor cycle repairs, electrical\u00a0 repairs landscaping.\u00a0\u00a0 \u00a0Garments, welding, concrete work, leather, painting, masonry and carpentry,\u00a0 gem cutting are also included.<\/p>\n

However, Yahapalana is not \u00a0deeply interested in supporting local industries. Prime Minister Ranil Wickremasinghe only speaks of foreign factories, not local enterprises.\u00a0\u00a0\u00a0\u00a0 \u00a0BOI Chairman Upul Jayasuriya, had, it appears, \u00a0had \u2018run down\u2019 Sri Lanka\u2019s only car assembly company Micro and its\u00a0 Chairman Dr. Lawrence Perera in an interview with the press. This is a very sad stance taken by the BOI Chairman,\u201d \u00a0said\u00a0 the Ceylon Motor Trader’s Association. Why was the government offering concessions to a new second hand car assembly plant without promoting Micro.<\/p>\n

Lanka Confectionary manufacturers Association issue a press release stating their difficulties. Our products are good. We export to over 55 countries. We employ over 50,000 direct and 500,00\u00a0 in indirect employment. Government has\u00a0 increased the import levies of confectionery fats from 60% to 160% in its 2016 Budget.. This increases\u00a0 the cost and price and will also\u00a0 lead to a reduction in the small pack sizes. Cheap, inferior import will now \u00a0flood the market, they said.<\/p>\n

Small and medium industries are badly affected by Yahapalana. In 2017, the government\u00a0 increased the salaries of workers\u00a0 by Rs. 2,500\u00a0 with a grace period of two years. Factories having over 800 workers will face inevitable closure if this salary increase is granted, said critics.\u00a0 In addition the factories\u00a0 have to pay VAT at 15%,\u00a0 this was not imposed on the exporters earlier. These taxes are for local factories, not for\u00a0 factories that foreigners will bring in, critics observed.<\/p>\n

Yahapalana loves foreigners. In 2015, Yahapalana Government\u00a0 removed taxes on leasing of land to\u00a0 foreigners and removed all restrictions on ownership of investments.\u00a0 Critics observe that this will help small and medium Indian companies to get entrenched in Sri Lanka and to eventually force out the local small and medium industries from the\u00a0\u00a0\u00a0\u00a0\u00a0 competition, using the concessions provided by the\u00a0 2015 budget.\u00a0 The 2017 Budget offered Five year multiple visas\u00a0\u00a0\u00a0 to foreign investors and their labor.\u00a0 Tax concessions and visa\u00a0 extensions would be offered to those who invest over USD 1.5 million. This would help attract more foreign investments and create employment, said Yahapalana .<\/p>\n

In 2017, Yahapalana government will pass a\u00a0 \u2018Special Deposit Account Act.\u2019 A foreign national who maintains a deposit account\u00a0 of USD 500,000 \u00a0will be eligible to obtain residency visa up to a period of 10 years. The spouse and the minor children are also eligible for the residency visas. The\u00a0 equivalent amount could be deposited in other foreign currencies such as\u00a0 Australian, Singapore, Canadian, Euro, British, Japanese\u00a0 or Swiss . A\u00a0 foreign national who makes such a deposit\u00a0 can also use it for investment in Sri Lanka. The Bill \u00a0is silent\u00a0 on the authority that will \u00a0monitor\u00a0 such investments, observed critics. (Continued)<\/p>\n","protected":false},"excerpt":{"rendered":"

KAMALIKA PIERIS Yahapalana has put in place many measures to impoverish the public. This is a planned move to break the spirit of the nation. Welfare benefits have been removed.\u00a0\u00a0 Yahapalana has stopped the fertilizer subsidy, free school uniforms, elders and disabled benefits, observed Chandraprema.\u00a0\u00a0 Construction projects started by the earlier government have been stopped […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[104],"tags":[],"class_list":["post-67698","post","type-post","status-publish","format-standard","hentry","category-kamalika-pieris"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/67698","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=67698"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/67698\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=67698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=67698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=67698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}