Editorial

The ‘new normal’ budget

Published

5 years ago

2020/11/22

The run-up to the 2021 budget which Prime Minister Mahinda Rajapaksa, wearing his finance minister’s hat, presented to parliament last week was obviously “new normal” as the post-covid minted cliché goes. There was no dramatic build-up to it with people rushing to buy vehicles, electronics, appliances or whatever as was often the rumor-fuelled case in the past. As has been inevitable in every past budget in the medium, if not the long term, the price of arrack and cigarettes routinely thrashed with a price stick, will go up once more. But nobody knows by how much and smokers and imbibers continue to pay the old price for their bad habits. But they have the certain knowledge that Christmas will soon be over on the authority of the budget speech.

This 2021 budget was crafted, as Dr. Dushni Weerakoon, head of the Institute of Policy Studies, said in a post-budget commentary, “under an exceptional level of uncertainty.” Obviously the crisis measures now in force will remain with us for a long time and it will be unrealistic to assume that fiscal policy will revert to its “pre-crisis setting anytime soon.” This must influence both spending priorities and what Weerakoon called “the slow burn scenario for revenue generation.” It is common knowledge that revenue has already slumped, and not only because of covid and its consequences. Assurances of boosting the country’s growth rate and narrowing the budget deficit, which has for too long burdened the country’s fiscal policy as well as its macro economy, have been repeated. These are old stories that have been heard before and few will buy them.

A persistent criticism of the budget is that it did not say enough about how the government is going to deal with the covid crisis, and the consequences arising from it, by taking the people into its confidence. This, more than all else, is the greatest danger confronting not only Sri Lanka but also the whole world. Neighboring countries is South Asia, including India, Pakistan and Bangladesh, have been much more transparent than we with Pakistan even going as far as labeling her next year’s budget as a “covid budget.” Former Central Bank Governor Nivard Cabraal, now the deputy in the finance ministry, who will be the key speaker for the government in the budget debate, has already said at one of the regular remotely held post-budget seminars that the timing was not right for declaring a covid-19 austerity year. But belt-tightening all round will be inevitable. Protecting the very large numbers of daily wage earners and others deprived of their livelihoods by the present crisis must remain high priority. Money printing alone to tide over cannot be the solution. Budgetary provision would have been appropriate.

There was a lot of old wine in new bottles in the 2021 budget speech including self-serving (or should we say government politician serving) measures announced. One of these is the raising of the private sector retiring age to 60-years for both men and women. Currently women working for private employers can retire at 50-years of age and men at 55 and gain access to their EPF benefits. Now both genders will have to wait longer – as many as 10 years in the case of women and five where men are concerned. There is no need to labour the harsh reality that the EPF is the only social security net that private sector workers have for their retirement. Government servants have had their pension benefits from colonial times, a cushion that served them well over a long period and a major attraction of a government job.

This raising of the retirement age of private sector employees also has the undisclosed benefit for the government of slowing EPF payouts and enhancing available funds for government borrowing. We all know that the EPF is the major captive lender to the government and the billions or trillions in its books is always on call for government expenditure. Given the overload of foreign borrowing that has long burdened this country and made the possibility of repayment default an ever-growing risk, postponing the payout of a looked forward to EPF nest egg to private sector employees, confers a substantial benefit on big brother. The private sector generally did not enforce the minimum retirement age rule but allowed employees to formally retire and gain access to their EPF with the assurance of an employment contract to keep them in harness post-retirement.

Let us not forget previous efforts made to convert the EPF to a pension fund that was abandoned due to massive resistance. Even if these attempts succeeded, the new pensioners paid from a contributory scheme – both employer and employee make monthly contributions to the EPF – would not have received the same benefits as their government counterparts enjoying non-contributory pensions. These matters, no doubt, will be raised during the ongoing budget debate which has been abbreviated because of the covid issue. It has up to now been lacklustre with the press and public galleries closed when the prime minister made his budget speech, a necessary precaution in the present context. But it has elicited, as budget debates must do, matters of widespread public interest. One of these relates to Dr. Anil Jasinghe, the previous Director General of Health who was highly regarded for his leadership in handling of the covid emergency. Health Minister Pavithra Wanniarachchi told parliament on Thursday that Jasinghe, currently Secretary Environment, was now attending covid meetings at her ministry. That sounded apologetic to most people not appeased by the suggestion that ‘kicking him upstairs’ was just a promotion issue.

It is clear from the budget that policies of curtailing inessential imports and import substitution would continue and a conscious effort appears to have been made not to heap new burdens on ordinary people for revenue reasons. But the impact of the Goods and Services Tax that has been announced have not yet emerged. It is unlikely that this will not leave people altogether unscathed. And that too not only with regard to their booze and fags.

All News Advertisement

Editorial

Anger wells up as people queue up

Published

18 hours ago

2026/02/22

Thilina Walpola

A shortage of cooking gas has affected several areas, where there are long lines of people near gas sales points. These scenes evoke one’s dreadful memories of winding queues for essential commodities in 2022. The two situations however do not bear comparison in that the country had no forex for petroleum imports in 2022 whereas there is no such problem at present; the gas shortage is mainly due to supply mismanagement.

The LP gas shortage has gladdened the hearts of the Opposition politicians immensely. They have got hold of something to beat the government with. They are making the most of the issue and urging the government to ensure an uninterrupted gas supply. Having failed to secure enough popular support to win elections, they are apparently deriving some perverse pleasure from the people’s predicament. In 2022, the then Opposition, including the JVP, used public resentment, which stemmed from shortages of essentials and long queues, to fuel their political projects and oust President Gotabaya Rajapaksa. The JVP went on to garner favour with the irate public and capture state power.

The JVP-NPP government is taking great pains to deny the obvious. On Friday, the ruling party frontbenchers went ballistic in Parliament, berating the Opposition for making what they termed a false claim that there was a gas shortage. They are far removed from reality. If they care to look around, they will see long lines of people near gas sales points in some areas. They had better come to terms with reality and sort out the gas shortage, which shows signs of worsening.

The Consumer Affairs Authority (CAA) has sought to make light of the gas shortage. It has been making political statements in defence of the government, instead of taking action to safeguard the interests of consumers. It has urged the public not to stock up on cooking gas. It has also claimed that the state-owned gas company, Litro, has had to meet a shortfall in the gas supply caused by the failure of Laugfs to cater to its consumers. The CAA needs to be told that there is no way the public can hoard cooking gas. They cannot store more LP gas than the cylinders in their possession can hold. It is next to impossible to purchase new cylinders to hoard gas. Litro also does not supply gas to Laugfs consumers using yellow cylinders, and therefore it does not have to release more gas into the market to meet a Laugfs gas supply shortfall.

The government insists that Litro has enough gas stocks. If so, why doesn’t it order Litro to increase the supply and end the gas shortage forthwith? The Opposition has said the gas shortage has come about as the government awarded the contract for supplying LP gas to a new company. One may recall that speaking in Parliament in December 2025, Opposition MP Chamara Sampath Dassanayake warned of a possible gas shortage in February. He said the government in its wisdom had contracted a new gas supplier who was not capable of ensuring a reliable supply. Former Minister Champika Ranawaka has said the government had to change the supplier in keeping with the conditions the US laid down for reducing the so-called Trump tariffs on Sri Lankan exports. The government has chosen to remain silent on these claims. An explanation is called for. If it is true that the new supplier is not equal to the task of ensuring a steady supply of LP gas, the government will have its work cut out to eliminate gas shortages and queues and prevent public anger from welling up.

People’s aversion to shortages of essentials and queues knows no bounds. It was one of the reasons for the crushing defeat the SLFP-led United Front government suffered in 1977. It also became the undoing of Gotabaya Rajapaksa’s presidency in 2022. Aragalaya, which developed into a massive protest campaign, started off as a series of agitations against fuel and milk food shortages, in urban areas. People did not have to take to the streets in 2022; they were already there waiting in winding queues. The situation is obviously not so bad at present, but anything is possible in politics. It is a big mistake for a government to take public resentment for granted.

Editorial

Reinventing the wheel

Published

2 days ago

2026/02/21

Thilina Walpola

Saturday 21st February, 2026

The JVP-NPP government has appointed another Parliamentary Select Committee (PSC) to study the electoral system under which the Provincial Council (PC) elections are to be conducted and submit proposals and recommendations to Parliament. It is bound to take a month of Sundays to complete that task. In fact, that is exactly what it is intended to do; the government wants the PC elections delayed further as it is not ready for an electoral contest.

Speaker Dr. Jagath Wickramaratne announced in the House that the PSC had been constituted under the chairmanship of Minister Vijitha Herath. Other members are Muneer Mulaffer, Attorney-at-Law Sunil Watagala, Arun Hemachandra, Ranjith Madduma Bandara, Mano Ganesan, Lakshman Nipuna Arachchi, Shanakiyan Rajaputhiran Rasamanickam, Samanmalee Gunasinghe, Darmapriya Wijesinghe, Chandana Sooriyaarachchi and Nizam Kariapper. The PSC is scheduled to commence deliberations shortly. Rasamanickam has already warned that the government is all out to postpone the PC polls further.

The JVP-NPP government, which came to power promising a new political culture, has demonstrated that it does not scruple to stoop to any level to safeguard its political interests. In the run-up to the 2024 presidential election, the JVP/NPP promised to hold the PC elections expeditiously if voted into power. The NPP election manifesto, A Thriving Nation: A beautiful Life, makes a solemn pledge to hold the PC polls within one year of the formation of an NPP government. “Provincial councils and local government elections, which are currently postponed indefinitely, will be held within a year to provide an opportunity for the people to join the governance” (p. 127). It is said that between saying and doing, many a pair of shoes is worn out.

There is no argument about the need for electoral reforms. The Proportional Representation (PR) system has shortcomings, which need to be rectified. The new Mixed Proportional system, under which the local government (LG) elections are held, is seriously flawed. It has led to a two-fold increase in the number of local councillors. There are now more than 8,000 LG members. This increase may have served the interests of politicians and their parties but certainly not those of the public. Why should the people be made to pay through the nose to maintain more than 8,000 councillors when the LG bodies can manage with only half that number as they did in the past.

If the PC elections are also held under the Mixed Proportional system, the number of provincial councillors will double. Currently, about 450 PC members are elected. There is no gainsaying that the Mixed Proportional system has to be changed before being used at the provincial level. The implementation of the new electoral system requires the delimitation of electoral boundaries. Much has been discussed about the flaws in this system and the remedies to be adopted. There is no need to reinvent the wheel.

What the government should do now is to amend the PC Elections Act and hold the long overdue PC elections under the PR system soon while the PSC proceedings are continuing. Future PC elections can be held under a new electoral system. The Opposition has been clamouring for the PC polls, and therefore an amendment to the PC laws can be ratified unanimously. After the PCs are duly elected, the PSC on electoral reforms can take as long as it needs to reinvent the wheel.

Editorial

PC polls in limbo amidst govt.’s mumbo jumbo

Published

3 days ago

2026/02/20

Thilina Walpola

Friday 20th February, 2026

The JVP-NPP government finds itself in an unenviable position over the Provincial Council (PC) polls, which have been in abeyance for nearly a decade. In the late 1980s, the JVP plunged the country into a bloodbath in a bid to prevent the establishment of the PCs, which it said would endanger the territorial integrity of the country. Today, it has a two-thirds majority in Parliament and its leader Anura Kumara Dissanayake is the Executive President. It is therefore well positioned to carry out its promise to do away with the PCs. After all, some election monitors have called upon it either to hold the delayed PC polls or to consider abolishing the PCs. It has chosen to do neither. Its leaders who vowed to liberate this country from India, which created the PC system, are seen pressing the flesh with the Indian leaders.

The Tamil National Alliance (TNA) has accused the JVP-NPP government of trying to use a parliamentary select committee (PSC) to delay the PC polls further. TNA MP Shanakiyan Rasamanickam has reportedly opposed a government plan to bring the PCs within the remit of a new PSC. He has pointed out that a PSC on the PCs already exists, and the duplication of the PSC process will only lead to confusion and create conditions for the PC polls to be further delayed.

MP Rasamanickam’s fear is not unfounded. It is obvious that the government is not ready for an election. Otherwise, it would have amended the PC Elections Act, enabling the Election Commission to hold the PC polls under the Proportional Representation system soon. All signs are that it will do everything in its power to avoid an electoral contest this year. Its fear of elections has given the lie to its claim that its approval rating has improved.

The TNA is not alone in urging the government to hold long-delayed PC elections. The SJB, the SLPP, the SLFP and the UNP are also demanding that the PC polls be held immediately. All these political parties facilitated the passage of an extremely bad Bill to amend the PC Elections Act in 2017, thereby helping the UNP-led Yahapalana government postpone the PC polls . They ought to tender an apology for that blatantly undemocratic act.

It may be recalled that the TNA, the SLFP, the JVP and the Joint Opposition, consisting of the SLFP dissidents who subsequently formed the SLPP were prominent among the parties that enabled the ratification of the aforesaid shockingly awful Christmas tree Bill loaded with more committee-stage amendments than its original text. The SJB stalwarts were in the UNP in 2017 and voted for that bad Bill, which was not consistent with Article 78 (3) of the Constitution: “Any amendment proposed to a Bill in Parliament shall not deviate from the merits and principles of such Bill.”

Meanwhile, JVP General Secretary Tilvin Silva has denied reports that the government is under pressure from India to hold the PC polls. He visited India recently and met Indian External Affairs Minister S. Jaishankar. However, one may recall that in April 2025, Indian Prime Minister Narendra Modi himself publicly urged Sri Lanka to hold the delayed PC polls. At the UNHRC session in Geneva in September 2025, an Indian delegation repeated Modi’s call. India has done so under pressure from Tamil Nadu.

Statements made by Tilvin, who is widely seen as the eminence grise of the ruling JVP-NPP coalition, are generally considered authoritative. If the NPP government is not under Indian pressure to ensure that the PCs will have elected representatives soon, the question is whether the Modi government has taken the Tamil Nadu politicians for a ride.

If the NPP government is not afraid of facing the public, it can amend the current PC election laws and hold the PC polls without taking cover behind the delimitation process, which is likely to drag on indefinitely. Mere rhetoric won’t suffice.