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According to\nthe provisions in the Budget for 2019, all\ngovernment servants are to be given a special allowance of Rs. 2,500. Pensions\nare to be increased. Samurdhi benefits are to be extended to an additional\n600,000 families. Existing Samurdhi beneficiaries are to be allowed to withdraw\nup to Rs. 30,000 in two instalments this year from their accumulated funds in\nthe Samurdhi Banks as spending money for the New Year and Christmas. The newly\nset up Office of Missing Persons is to pay a monthly allowance of Rs. 6,000\neach for the families of all missing persons until the Office of Reparations is\nestablished and a larger sum paid. The fact that this is an election year, will\nnaturally lead many people to suspect that all these provisions are election\nrelated. <\/p>\n\n\n\n
The\ngovernment seeks to justify extending Samurdhi benefits to an additional\n600,000 families on the grounds that \u2018deserving families\u2019 had been kept out of\nthe scheme for political reasons. It appears that the government suddenly\nbecame aware of that alleged long standing injustice only after ruling the\ncountry for over four years. The rhetoric of the government makes it obvious\nthat the additional 600,000 Samurdhi recipients will be selected on political\ncriteria for reasons more to do with elections than with poverty alleviation.\nThere is an inherent contradiction in the government claiming on the one hand\nthat poverty has been reduced and then increasing the number of Samurdhi\nrecipients by over 40%. Furthermore, spending money for the\nNew Year and Christmas is being released from the compulsory savings of\nSamurdhi recipients in 2019 when such a thing never happened in previous years.\nAfter releasing Rs. 30,000 in a single year, it is obvious that there will no\nmoney to be released in that manner in the coming years. <\/p>\n\n\n\n
The purpose of having compulsory\nsavings for Samurdhi recipients is to encourage the savings habit and to enable\nthem to utilize that money for self-employment and other livelihood related\nactivities. We have not heard of the compulsory\nsavings of Samurdhi recipients being released as spending money for festivals. Except\nfor this Rs. 30,000 coming out of the compulsory savings of the Samurdhi recipients,\nall the other measures mentioned above will result in an increase in government\nexpenditure. Through their first Budget in 2015, the\nyahapalana government gave a special allowance of Rs. 10,000 to all government\nservants, reduced the price of fuel and gas and certain foodstuffs so as to win\nthe Parliamentary election on August 2015. Thereafter, the taxes collected from\nthe people were increased from Rs. 1,050 billion in 2014 to Rs. 1,355 billion in 2015 – an\nincrease of Rs. 305 billion in a single year. <\/p>\n\n\n\n
Such an increase would have been spread out over at\nleast three years under my government. As a matter of policy, we kept the\nyear-on-year increase in taxes within the range of Rs. 50 to 100 billion a year\nso as not to oppress the public. Under my presidency, the economy grew at an average\nannual rate of 6% from 2006 to 2009 despite a raging war and at 7.4% in the\nfive post war years from 2010 to 2014. No government in post-independence\nhistory has achieved an average growth rate of 6% leave alone 7.4%. Because of\nthat growth, the economy was able to absorb the relatively modest annual increases\nin taxation under my government. In 2019, the government hopes to collect Rs. 2,077 billion as\ntaxes \u2013 twice the amount that was collected 2014. All that money is to be wrung\nout of the public in a context where the annual growth\nrate has declined to 5% in 2015, 4.5% in 2016, 3.1% in 2017 and it is expected\nto be around 3% in 2018. <\/p>\n\n\n\n
The total outstanding government debt increased from\nRs.7,391 billion in 2014 to more than Rs. 11,859 billion by the end of 2018 –\nan increase of 62%. This increase in debt has been incurred for no other\npurpose than paying for the cost of inducing people to vote for the yahapalana\ngovernment. These enormous borrowings were not spent on any development work. When\ngovernment salaries are increased, and various other concessions given, it may\ngive the recipient the feeling that he has got something. But very soon, he\nfinds that whatever is given by this government with one hand is taken away by the\nother. Due mainly to excessive taxation and currency depreciation, any salary\nincrease given by this government disappears almost immediately. <\/p>\n\n\n\n
The Rupee depreciated from Rs. 131 to the Dollar at\nthe end of 2014 to reach around Rs.180 under yahapalana rule, driving up the\nprices of all imports. Under my government, taxes were much lower, and the\nexchange rate was controlled to prevent increases in the prices of imports. So\nwhatever was given by my government as salary increases actually stayed in the\nhands of the recipients. The yahapalana finance minister who became popular by increasing\ngovernment salaries by Rs. 10,000 and reducing the prices of fuel and\nfoodstuffs was forced out of the finance ministry and assigned the foreign\nministry within a couple of years after he became unpopular for increasing\ntaxes to pay for those concessions. That gives an indication of the turnaround\ntime between doling out concessions to win votes and having to pay for them under\nthe yahapalana government. <\/p>\n\n\n\n
Sri Lanka is\nnow caught up in a vicious cycle of increasing government spending for the\nelectioneering needs of the incumbent government, heavy borrowing to finance\nthat expenditure and increased taxation of the public to service those loans. <\/p>\n\n\n\n
Mahinda\nRajapaksa<\/em><\/strong><\/p>\n\n\n\n Leader\nof the Opposition <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Mahinda Rajapaksa Leader of the Opposition According to the provisions in the Budget for 2019, all government servants are to be given a special allowance of Rs. 2,500. Pensions are to be increased. Samurdhi benefits are to be extended to an additional 600,000 families. Existing Samurdhi beneficiaries are to be allowed to withdraw up to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[125,6],"tags":[],"class_list":["post-87093","post","type-post","status-publish","format-standard","hentry","category-mahinda-rajapaksa","category-politics"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/87093","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=87093"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/87093\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=87093"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=87093"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=87093"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}