News
Budget lacks creative solutions and exacerbates existing crisis – Dr. Godahewa
Budget 2024 is like a fairy tale rather than a pragmatic solution to pressing economic issues, SLPP MP Dr. Nalaka Godahewa has said.
Taking part in the current budget debate, former State Minister said: “Two paramount challenges loom large—the persistent economic contraction and the escalating national debt. A practical budget should provide answers to these challenges, addressing how the government plans to revitalize the economy and escape the debt trap. Unfortunately, the 2024 Budget falls short, lacking creative solutions and potentially exacerbating existing conditions.
The government, once again, presents optimistic revenue targets, reminiscent of the previous year. A notable income shortfall in 2023 raises concerns about the feasibility of the projected 45% increase in revenue for 2024, especially given the ongoing economic contraction. The Budget seems to harbor unrealistic expectations, and if history is any guide, the actual revenue may fall short, as evidenced by the 17% income deficit in 2023.
The Budget’s approach to expenditure compounds the issue. Despite potential revenue shortfalls, government expenditure for 2024 is estimated at 6978 billion rupees, reflecting a substantial 34% increase from the latest estimates of 2023. To meet revenue targets, the government resorts to tax hikes, exemplified by the recent VAT increase from 15% to 18%, affecting essential goods like fuel, electricity, and telephone charges.
This tax-heavy approach, a commonly accepted economic principle, can discourage entrepreneurs, decrease investments, and lead to tax evasion. Such consequences contribute to the 17% income deficit in 2023 and may persist in the coming year, rendering the 45% revenue increase target for 2024 unrealistic.
The Budget gap, arising when government revenue falls short of expenditure, is projected to be Rs 2851 billion in 2024. Bridging this gap through further borrowings or printing money is not a sustainable solution, particularly if the borrowed funds are directed toward consumption rather than income-generating development activities.
The breakdown of government expenditure for 2024 reveals a disproportionate focus on recurrent expenditure (Rs 5345 billion) compared to capital expenditure (Rs 1209 billion). This reflects an 11% increase in recurrent expenditure and a 1% decrease in capital expenditure for 2024. Despite promises to prioritize education and human capital development, the budgeted expenditure on education remains stagnant, and expenditure on women and social empowerment is halved.
The looming tax interest of Rs 2,634 billion, almost half of total recurring expenses, underscores the severity of the situation. Excessive borrowings have led the country into this crisis, and the trend continues, with the 2024 Budget proposing to borrow nearly Rs 3 trillion, exacerbating the existing debt burden.
The President’s grand ideas, articulated in the three main pillars of economic recovery—export-oriented competitive economy, environmentally friendly green and blue economy, and a digital economy—have not seen substantial progress after a year. The lack of consistency, evident in the shift towards a gig economy in the latest Budget, is a persistent issue.
Public trust in the government’s economic management and budgetary proposals has eroded. Citizens’ immediate concerns revolve around basic needs, rising utility bills, and the disparity between lofty economic goals and daily struggles. The prevailing crisis demands a unified and committed leadership capable of delivering tangible results.
The lack of coordination between ministries further compounds the challenges. Conflicting government actions, such as advocating for investment while raising production costs, or acknowledging the importance of the small and medium sector while undermining local producers through imports, highlight the need for cohesive decision-making.
To navigate the crisis successfully, the country requires a clear agenda, a consensus-driven roadmap led by competent leaders for effective implementation. Setting clear priorities with measurable targets in crucial areas like tax collection, tourism, export development, renewable energy, and foreign direct investment is imperative.
The proposed Budget for 2024, if implemented, not only fails to address critical issues but may exacerbate economic challenges. The country urgently needs a comprehensive economic development plan with clear goals, timelines, and accountability measures. The government must redirect its focus toward reactivating the economy, strengthening the export sector, fostering tourism, supporting small and medium businesses, attracting new investments, and addressing the root causes of the economic downturn.
In conclusion, at this darkest hour, a collective and committed leadership is essential to guide the nation out of the crisis. The time for experiments and ad hoc solutions has passed. It’s time for an integrated economic development plan to rebuild the country.”
Latest News
The Sun is directly overhead Warakapola, Aranayaka, Gampola, Bibile, Inginiyagala, and Akkaraipattu at about 12:12 noon today (08)
On the apparent northward relative motion of the sun, it is going to be directly over the latitudes of Sri Lanka from the 05th to 15th of April this year.
The nearest areas of Sri Lanka over which the sun is overhead today (08th) are Warakapola, Aranayaka, Gampola, Bibile, Inginiyagala, and Akkaraipattu at about 12:12 noon.
News
AKD admits import of substandard coal, blames technicalities and supplier
… announces temporary relief package
President Anura Kumara Dissanayake yesterday acknowledged in Parliament that the import of substandard coal had adversely impacted electricity generation.
“There’s an issue with the coal. That’s true,” the President said, addressing the House.
President Dissanayake maintained that the problem had not arisen from the tender process but from the failure of the supplier to deliver coal that met the required standards. “The issue did not arise from the tender process. It resulted from the supplier’s failure to deliver coal that met the required standards. I would also like to point out that coal is not tested by individuals through simple inspection or personal judgment; it is examined in certified laboratories,” he said.
The President went on to say that coal shipments are tested through certified laboratories before dispatch, and an initial payment of 80 percent was made after receiving laboratory certification confirming that the coal meets stipulated specifications.
The President said the balance 20 percent was released only after a second verification carried out by an Indian laboratory selected for the purpose in 2023. Tests had revealed that three shipments failed to meet the required specifications.
The President added that although some shipments had passed laboratory tests, operational assessments at the power plant indicated that the coal was not performing to the expected standard. As a result, the government had withheld the remaining payments for certain consignments, imposed penalties on some suppliers, and in a few instances suspended even the initial 80 percent payment.
He said the use of substandard coal would increase electricity generation costs as the shortfall would have to be compensated by alternative sources, such as diesel. However, he assured Parliament that the additional costs would be recovered from the coal suppliers and would not be passed on to consumers.
The President also said the government expected to receive the fourth and fifth tranches of financial assistance from the International Monetary Fund by the end of May. He told Parliament that Sri Lanka hoped to reach a staff-level agreement with the IMF by Thursday, which would enable the country to secure about USD 700 million in funding.
Meanwhile, the President announced a temporary increase in cash assistance under the Aswesuma welfare programme to provide relief to low-income households during the April festive season.
He said the government continued to face challenges in accurately identifying eligible beneficiaries but noted that Aswesuma remained the only available framework to determine eligibility. Under the scheme, current benefit categories include payments of Rs. 17,500, Rs. 10,000 and Rs. 5,000.
For April, the Rs. 17,500 allowance will be increased by Rs. 7,500 to Rs. 25,000, while the Rs. 10,000 payment will rise by Rs. 5,000 to Rs. 15,000. Beneficiaries in the transitional category will receive an additional Rs. 2,500. The temporary increases are expected to cost the Treasury about Rs. 8.5 billion and will apply only for the month of April.
Addressing electricity tariffs, the President said the adjustment that came into effect on April 1 had been determined earlier and was not linked to the present crisis. According to him, the increase for households consuming less than 30 units amounts to about Rs. 15 per month, while other tier increases translate to approximately Rs. 1 to Rs. 1.50 per day.
He said the government had considered three options to manage rising electricity costs: requiring the Ceylon Electricity Board to absorb the losses, transferring the burden entirely to the Treasury, or passing the cost on to consumers. Instead, the government opted for a shared approach involving the State, the public and the national power system operator.
Under this arrangement, consumers using less than 90 units of electricity will receive a subsidy during the next tariff revision. The government has allocated Rs. 5 billion per month for the programme, amounting to Rs. 15 billion over three months. The President said losses in the electricity sector during the same period were estimated at about Rs. 32 billion.
Turning to agriculture, the President outlined measures to stabilise fertiliser supply amid rising global prices. He said the Department of Agriculture currently held about 14,000 metric tonnes of urea imported at the previous price, while private companies also possessed stocks.
Following discussions with fertiliser suppliers, companies had agreed to release all remaining stocks purchased at the old price to Agrarian Service Centres. These quantities, together with government stocks, are expected to be sufficient for two paddy cultivation seasons.
However, fertiliser required for the third season would have to be imported at higher prices. The President said recent offers for urea ranged from USD 680 to USD 850 per metric tonne.
To cushion farmers from price increases, the government has decided to sell fertiliser for the third season at a fixed price of Rs. 10,200 per bag despite the estimated market price ranging between Rs. 13,500 and Rs. 14,000. The Treasury will absorb the difference, amounting to roughly Rs. 3,000 per bag, at a total estimated cost of about Rs. 1.7 billion.
The President also announced increases in fertiliser subsidies. Farmers cultivating paddy will receive Rs. 30,000 per hectare, up from Rs. 25,000, while subsidies for subsidiary crops during the Yala season will increase from Rs. 15,000 to Rs. 18,000. Small tea holders will receive a one-time additional payment of Rs. 5,000 per fertiliser bag in addition to the existing Rs. 4,000 subsidy.
He said the expanded fertiliser support programme would cost the government about Rs. 6.5 billion, with an additional Rs. 600 million allocated specifically for fertiliser subsidies.
The President also outlined plans to manage rising energy costs, particularly in the fuel sector. He said the government had considered allowing fuel prices to fully reflect market costs or introducing a subsidy mechanism.
According to current estimates, he said, diesel would exceed Rs. 600 per litre if sold strictly at cost. Instead, the government has decided to maintain the existing tax structure and provide Treasury-funded subsidies.
Under the proposed scheme, diesel will receive a subsidy of up to Rs. 100 per litre, while petrol will receive up to Rs. 20 per litre. Fuel prices will continue to be adjusted based on monthly cost calculations, with the next revision scheduled for May 1.
The subsidy programme is expected to cost around Rs. 20 billion per month and will operate for three months at an estimated total cost of Rs. 60 billion.
In addition, fishermen will receive targeted assistance. Small fishing boats will qualify for an extra Rs. 50 per litre fuel subsidy for up to 625 litres per month, credited directly to bank accounts. This will provide a monthly benefit of Rs. 31,250 per boat.
Multi-day fishing vessels will receive a fuel allowance of Rs. 150,000 per vessel during the three-month subsidy period, the President said.
By Saman Indrajith
News
‘Sri Lanka – China relations: Community with a Shared Future’ launched
The Chinese Embassy in Colombo launched the commemorative publication in connection with the 70 years of Sri Lanka Diplomatic Relations with China titled, “Sri Lanka – China Relations: Community with a Shared Future” on 03 April 2026 in the presence of a large distinguished audience.
Cao Jing, Deputy Director General of the Asian Department of the Ministry of Foreign Affairs, Officials of the Chinese Foreign Ministry, Diplomatic Corps, Xu Yan of the Chinese People’s Association for Friendship with Foreign Countries, officials of Ministry’s line agencies and state-owned enterprises and several other guests having interests in Sri Lanka participated at the event.
The commemorative publication captures the essence of Sri Lanka’s resilience as a nation by tracing its rich history, civilization and culture. It offers insights into salient features of Sri Lanka that has been recognized for ages as “a land like no other”.
The publication was authored by the distinguished career Ambassador Dr. Ananda Kumarasiri.
In delivering the opening remarks Ambassador Majintha Jayesinghe, expressed his appreciation to the author Dr. Ananda Kumarasiri. Recalling the establishment of Diplomatic Relations in 1957, Sri Lankan Ambassador stated that the impressive tapestry of genuine friendship that exists between our two countries since ancient times have grown exponentially.
Ambassador Majintha Jayesinghe expressed the aspiration that this book will present an insightful account of the rich heritage of Sri Lanka’s relations with China. He hoped that the commemorative publications would encourage future generations to look at the shared history and relations with pride and motivate them to further enhance this unique friendship and goodwill to higher vistas of achievements.
In his address, Ambassador, Dr. Ananda Kumarasiri among other important observations, pointed out that there is much scope for Sri Lanka and China to collaborate in a number of fields. In particular, he highlighted that China’s tremendous technological and industrial progress can be harnessed for Sri Lanka to embark into-the development of alternative sources of energy, backward integration of Sri Lanka’s primary resources that would ensure value added exports and also in recycling wastes from various primary resources.
-
Features3 days agoRanjith Siyambalapitiya turns custodian of a rare living collection
-
News6 days ago2025 GCE AL: 62% qualify for Uni entrance; results of 111 suspended
-
News3 days agoGlobal ‘Walk for Peace’ to be held in Lanka
-
Editorial6 days agoSearch for Easter Sunday terror mastermind
-
Opinion5 days agoHidden truth of Sri Lanka’s debt story: The untold narrative behind the report
-
Opinion6 days agoIs there hope for Palestine?
-
News1 day agoLankan-origin actress Subashini found dead in India
-
Features5 days agoThe Ramadan War
