Business
‘Revenue collecting PCs had only Rs. 40 billion for public service in 2021’
By Sanath Nanayakkare
There wouldn’t be a better time for major political parties to discuss and arrive at a consensus for abolishing the revenue-collecting provincial council system which hasn’t done anything more than just distributing government-sponsored welfare goods to the people, Pasanda Yapa Abeywardena, chief organiser of Lankalokaya and former provincial councilor said at a press conference in Colombo on January 19.
Pasanda who enjoys familial relationships with political higher-ups in the country while being the current chairman of Sathosa said that the President of Sri Lanka can travel across the island by helicopter in just one and a half hours which is only the size of Virginia in the United States, but has so many layers of governance including executive presidency, parliament, provincial councils, district secretariats, local government institutions etc.
“It is a known fact that provincial councils are mere training centres for the offspring of senior politicians and there is a demand in the country for cost-effective small government. In such a context, all political parties should have a dialogue in the next six months to abolish provincial councils, and strengthen the local government bodies through district development councils administered by the central government. Such a mechanism would reduce administrative layers while expanding the effective understanding of policies made by the government. Then the decisions made by the cabinet of ministers will easily flow to the ground level and the implementation process will be more dynamic. The President also has expressed similar views in this regard, he said.
“In the year 2021, revenue of provincial councils amounted to Rs. 331 billion while total expenditure was Rs. 316 billion, out of which Rs. 279 billion was spent on the payroll without having to bear the costs of provincial councilors. All in all, the provincial councils had only about Rs. 40 billion to spend on public services,” he said.
“In fact, I know from experience that nothing meaningful could be achieved through provincial councils other than merely being an institution of the central government that distributes chairs, mammoties etc., given by the government where provincial councilors claim to be the benefactors.”
“Provincial councils came to its end of term in April 2019 and five years have lapsed since the defunct of the system. Nevertheless, there is no public outcry to restore the system. PC system has never contributed to making any laws of the country or has never initiated a good programme on its own. So, we urge the political parties to engage in a meaningful discussion in the next six months before the country goes to presidential and parliamentary elections.”
He pointed out that the abolition of the PC system would help reduce the tax burden on the people, and that decision has to be taken well before PC elections are held.
Pasanda added that neither the people in the North of Sri Lanka or the government of India are interested in provincial councils anymore though the system was introduced by then government as a means of power decentralisation in Sri Lanka.”
“India is keen to have an equitable solution to the ethnic issue in Sri Lanka. However, I have reliable information that India doesn’t see provincial councils in the North and East would be an enabler in that quest. So, the abolition of provincial councils won’t trigger any geopolitical tensions with India,” he said.
An International Monetary Fund (IMF) team led by Evan Papageorgiou visited Colombo from April 3 to 11, 2025. After constructive discussions in Colombo, Mr. Papageorgiou issued the following statement:
“Sri Lanka’s ambitious reform agenda supported by the IMF Extended Fund Facility (EFF) continues to deliver commendable outcomes. The post-crisis growth rebound of 5 percent in 2024 is impressive. Inflation declined considerably in recent quarters and has fallen to ‑2.6 percent at end-March 2025. Gross official reserves increased to US$6.5 billion at end-March 2025 with sizeable foreign exchange purchases by the central bank. Substantial fiscal reforms have strengthened public finances.
“The recent external shock and evolving developments are creating uncertainty for the Sri Lankan economy, which is still recovering from its own economic crisis. More time is needed to assess the impact of the global shock and how its implications for Sri Lanka can be addressed within the contours of its IMF-supported program.
“The government’s sustained commitment to program objectives is ensuring policy continuity and program implementation remains strong. Going forward, sustaining the reform momentum is critical to safeguard the hard-won gains of the program and put the economy on a path toward lasting macroeconomic stability and higher inclusive growth.
“Against increased global uncertainty, sustained revenue mobilization efforts and prudent budget execution in line with Budget 2025 are critical to preserve the limited fiscal space. Boosting tax compliance, including by reinstating an efficient and timely VAT refund mechanism, will help contribute to revenue gains without resorting to additional tax policy measures. Avoiding new tax exemptions will help reduce fiscal revenue leakages, corruption risks and build much needed fiscal buffers, including for social spending to support Sri Lanka’s most vulnerable. Restoring cost recovery in electricity pricing will help minimize fiscal risks arising from the electricity state-owned enterprise.
“The government has an important responsibility to protect the poor and vulnerable at this uncertain time. It is important to redouble efforts to improve targeting, adequacy, and coverage of social safety nets. Fiscal support needs to be well-targeted, time-bound, and within the existing budget envelope.
“While inflation remains low, continued monitoring is warranted to ensure sustained price stability and support macroeconomic stability. Against ongoing global uncertainty, it remains important to continue rebuilding external buffers through reserves accumulation.
“Discussions are ongoing, and the authorities are encouraged to continue to make progress on restoring cost-recovery electricity pricing, strengthening the tax exemptions framework, and other important structural reforms.
“The IMF team held meetings with His Excellency President and Finance Minister Anura Kumara Dissanayake, Honorable Prime Minister Dr. Harini Amarasuriya ; Honorable Labor Minister and Deputy Minister of Economic Development Prof. Anil Jayantha Fernando, Honorable Deputy Minister of Finance and Planning Dr. Harshana Suriyapperuma, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, Secretary to the Treasury Mr. K M Mahinda Siriwardana, Senior Economic Advisor to the President Duminda Hulangamuwa, and other senior government and CBSL officials. The team also met with parliamentarians, representatives from the private sector, civil society organizations, and development partners.
“We would like to thank the authorities for the excellent collaboration during the mission. Discussions are continuing with the goal of reaching staff-level agreement in the near term to pave the way for the timely completion of the fourth review. We reaffirm our commitment to support Sri Lanka at this uncertain time.”
The Commercial Bank of Ceylon has transformed its iconic ‘Foreign Branch’ into the ‘Corporate Branch,’ reaffirming its commitment to delivering dedicated, comprehensive financial solutions to corporate and trade customers.
The Bank said this transformation represents a new milestone in its illustrious journey, and resonates with the rich commercial heritage of Colombo, a city that has long served as a vital trading hub in the region.
Strategically located at the Bank’s Head Office at Commercial House, 21, Sir Razeek Fareed Mawatha (Bristol Street), Colombo 1, this rebranded Corporate Branch stands as a first of its kind in Sri Lanka —a premier financial hub tailored exclusively to the needs of corporate customers, the Bank said. The transformation aligns with the Bank’s vision of providing unparalleled service excellence, bespoke financial solutions, and fostering long-term business partnerships.
Commenting on this strategic initiative, Commercial Bank’s Managing Director/CEO Sanath Manatunge stated: “It is our aspiration that just as the historic Delft Gateway, at which our Head Office is located, once opened the path to the Dutch Fort, our Corporate Branch will chart a new era of enduring and prosperous business collaborations, that will extend beyond Sri Lanka’s shores.”
Fits Retail has partnered with retail giant Abans PLC to showcase the iconic DeLonghi coffee machines at two of Colombo’s most prestigious locations: Abans Elite Colombo 3 and Abans Havelock City Mall showrooms.
At these dedicated demonstration zones, visitors can discover the unparalleled precision engineering and user-friendly technology that have made DeLonghi machines the preferred choice for discerning coffee lovers in more than 46 countries worldwide. Renowned for consistently delivering café-quality espresso, cappuccino, and even specialty cold brews, DeLonghi machines exemplify Italian innovation at its finest.
Yasas Kodituwakku, CEO of Fits Retail, expressed excitement about the collaboration: “This partnership represents our unwavering commitment to bringing global coffee excellence to Sri Lankan connoisseurs. With Abans PLC, we’re creating more than just demonstration spaces; we’re curating premium destinations for an authentic coffee experience.”
“As pioneers of premium lifestyle experiences in Sri Lanka, our collaboration with Fits Retail aligns seamlessly with our vision of elevating everyday moments into exceptional experiences,” said Tanaz Pestonjee, Director Business Development at Abans PLC.
Iraq sandstorm leaves many with breathing problems
Trump freezes $2bn in Harvard funding after university rejects demands
Amin, bowlers leave West Indies Women’s World Cup hopes hanging by a thread
-
News4 days agoSuspect injured in police shooting hospitalised
-
Features5 days agoRobbers and Wreckers
-
Features7 days agoSri Lanka’s Foreign Policy amid Geopolitical Transformations: 1990-2024 – Part III
-
Midweek Review7 days agoInequality is killing the Middle Class
-
Business4 days agoSanjiv Hulugalle appointed CEO and General Manager of Cinnamon Life at City of Dreams Sri Lanka
-
Business6 days agoNational Anti-Corruption Action Plan launched with focus on economic recovery
-
Features3 days agoLiberation Day tariffs chaos could cause permanent damage to US economy, amid global tensions
-
News7 days agoIChemC signs MoU with KIIT, India