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Govt. steps up economic reforms and support for paddy farmers: Presidential advisor
The government was taking steps to stabilise the economy and ensure fair conditions for paddy farmers, Senior Advisor to the President on Economic Affairs and Finance, Prof. Anil Jayantha Fernando, told The Island on Wednesday (06).
Addressing the challenges faced by the agricultural sector, Fernando noted that Sri Lanka’s rice market was dominated by a few major players. “The government has to make temporary interventions until the conditions for a competitive market are established,” Fernando said, adding, “We are already planning to purchase substantial amounts of paddy from farmers, in the next harvest season, to support them and prevent market manipulation.”
Prof. Fernando pointed out that the government has extended a fertiliser subsidy to paddy farmers, with the expectation that yields will improve in the coming seasons. He questioned the logic of leaving market conditions unchecked when a few large buyers acquire significant stocks, controlling prices at the expense of farmers. “Can we do nothing by saying this is how the invisible hand of the market operates?” he asked, stressing the need for government intervention to ensure farmers can at least recover production costs.
Addressing broader economic policies, Fernando asserted that the National People’s Power (NPP) government is steering the economy in the right direction, although he cautioned that visible results may take time. “When we took over, we recognised the economic challenges left by the previous administration. We identified key priority areas, though they may not always align with the public or media’s immediate concerns,” he said, adding that the focus remains on strengthening productive sectors and restoring price stability in the long run.
One significant challenge, according to Fernando, is rebuilding trust with both local and international investors. “We’ve made progress, but winning confidence back takes time,” he explained. Additionally, Fernando highlighted the lack of coordination among state agencies, which has hampered development efforts. In response, the government has appointed Dr. Hans Wijayasuriya, CEO of Axiata’s Telecommunications Business, as Chief Advisor to the President on Digital Economy. Wijayasuriya is tasked with creating common databases and a centralised platform to streamline efforts across sectors.
Regarding the country’s limited land resources, Fernando emphasised the need for scientific land management and criticised the stagnation in agricultural productivity over the past 40 years. National physical plans need to be updated, he argued, to ensure sustainable land use.
In response to allegations of money printing, Fernando clarified that the government is not engaged in this practice. He explained that what some media outlets refer to as “money printing” is actually a system through which the Central Bank temporarily provides funds to banks, which are returned within a day or a week. This mechanism is aimed at gradually lowering interest rates in the money market to stimulate the economy, he said. “This is not the same as the Central Bank buying Treasury bills and lending to the government. That practice has been completely halted.”
Explaining the rationale behind this approach, Fernando outlined how daily liquidity management supports the banking sector. “If the Central Bank doesn’t do this, the banking system might collapse,” he warned, noting that liquidity imbalances among banks require a regulatory solution to prevent systemic risk.
Fernando also addressed recent criticisms from opposition figures regarding fuel prices. He explained that Sri Lanka’s debt restructuring agreement with the International Monetary Fund (IMF) mandates an increase in government revenue to 15% of GDP by 2025. “Fuel taxes are essential for meeting this revenue target,” he said, adding, “If we can demonstrate to the IMF that we are on the right track, we may consider tax reductions in the future.”
In summary, Fernando outlined the government’s multi-pronged approach to stabilise the economy, support paddy farmers, and maintain fiscal discipline. However, he cautioned that the public might need to wait for significant improvements, as the NPP government’s policies are designed for long-term recovery rather than immediate relief. (RK)
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Namal, Janaki further remanded
SLPP MP Namal Rajapaksa and former Krrish Group Executive Director and businesswoman Janaki Siriwardena were further remanded until October 23 by the Colombo Chief Magistrate’s Court yesterday in connection with an alleged Rs. 70 million bribery case involving the Krrish Group.
Colombo Chief Magistrate Asanga S. Bodaragama rejected the bail application filed on behalf of Siriwardena.
The Magistrate said the order on Namal Rajapaksa’s bail application was not ready and would be delivered on the next court date.
The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) arrested the two suspects and produced them before court over allegations that a bribe of Rs. 70 million had been solicited and accepted in connection with the affairs of the Krrish Group.
News
Review of progress in reforms and modernisation of key state revenue-collecting institutions
A progress review meeting on reforms and modernisation initiatives at Sri Lanka’s key state revenue-collecting institutions was held on Thursday (15) at the Presidential Secretariat, chaired by Secretary to the President Dr Nandika Sanath Kumanayake, with the participation of representatives of the International Monetary Fund (IMF) and officials of the Revenue Administration, Reform and Modernisation Bureau (RARMB) of the Presidential Secretariat.
At the meeting, the IMF representatives commended the revenue collection efficiency of the Department of Inland Revenue, Sri Lanka Customs and the Department of Excise, the country’s three leading state revenue-collecting institutions. Extensive discussions were also held on the progress of the reform and modernisation programmes being implemented at these institutions.
Secretary to the President Dr Nandika Sanath Kumanayake outlined the progress achieved by the three institutions to date and the reforms planned for implementation in the future.
The IMF representatives also highlighted the importance of strengthening risk management, developing human resources and ensuring the efficient operation of computer systems at the respective institutions.
Senior Additional Secretary to the President Seevali Arukgoda also attended the meeting. The IMF was represented by Cindy Negus, Senior Economist in Revenue Administration for the Asia and Pacific, Europe, Middle East and Central Asia regions; Alison Lister, Revenue Administration Adviser; and Gregory Toppin, Resident Revenue Adviser in Sri Lanka. A group of senior officials from the Revenue Administration, Reform and Modernisation Bureau of the Presidential Secretariat also participated.
(President’s Media Division)
News
Cut power bills by 3-5%, don’t hike them, consumers demand
By Anuradha Hiripitiyage
Electricity tariffs should be reduced by between 3 and 5 percent instead of being increased by 2.88 percent in the fourth quarter, as proposed by the National System Operator (NSO), Electricity Consumers’ Association Secretary Sanjeewa Dhammika said.
Addressing a media briefing in Maradagahamula, Divulapitiya, Gampaha, yesterday (16), Dhammika said a proper assessment of electricity generation costs, including the contribution of hydropower, could justify a reduction in tariffs.
He said the NSO had sought approval from the Public Utilities Commission of Sri Lanka (PUCSL) for a 2.88 percent tariff increase, which was expected to generate an additional Rs. 4,438 million.
However, the Commission had indicated that an increase of only 1.46 percent was warranted, amounting to Rs. 2,245 million, he said, adding that even this increase was unnecessary.
Dhammika alleged that the proposed revision sought to pass on to electricity consumers the financial burden arising from the non-arrival of five coal shipments and failed tenders.
“The Government had said that the burden of coal-related losses would not be passed on to the public. It is therefore unjust to make consumers bear these costs,” he said.
He pointed out that the PUCSL had forecast that hydropower would account for 32.34 percent of total electricity generation in the coming quarter, while the cost of such generation would represent only 3.45 percent of the overall cost of electricity production.
Consumers should benefit from the lower cost of hydropower generation rather than bear the burden of more expensive thermal power generation, he said.
Dhammika also questioned the inclusion of Rs. 669 million in capacity charges that had not been approved by the PUCSL, as well as a further Rs. 1,069 million to repay loans relating to incomplete projects.
Including such charges in the proposed tariff revision was unjustifiable, he said.
The PUCSL has given the public until October 30 to submit their views on the proposed tariff revision.
Dhammika said the possibility of increased hydropower generation in the coming weeks, as reservoir levels rise, should also be taken into account when determining electricity tariffs.
He maintained that tariffs could be reduced by 3 to 5 percent if hydropower generation was properly assessed and coal-related losses and unapproved charges were excluded from the calculations.
He further claimed that electricity tariffs could be reduced by as much as 10 percent through the promotion of renewable energy and the effective use of solar power and battery storage systems.
The Electricity Consumers’ Association urged the Government to withdraw the proposed tariff increase, insisting that consumers should not be made to bear costs arising from coal supply problems and other disputed charges.
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