Connect with us

News

Minister Cabraal says lockdowns as devastating as Covid-19

Published

on

By Shamindra Ferdinando

State Minister of Money and Capital Market and State Enterprise Reforms Ajith Nivard Cabraal says that in spite pressure mounting on the govenrment to extend the current lockdown further, it should tread cautiously.

State Minister Cabraal, who served as the Governor of the Central Bank, from 2006 to 2015, said that lockdowns caused irreparable damage at a time the national economy was under severe pressure due to Covid-19. The lockdowns could be quite devastating and inflict unbearable losses on the economy, he noted.

Cabraal pointed out that those who relentlessly pushed for lockdowns didn’t take into consideration other vital factors. He said the people should strictly follow health guidelines and get vaccinated, as quickly as possible.

In addition to State Minister Cabraal, Aviation Minister and SLPP strongman in Gampaha, Prasanna Ranatunga, also opposed the lockdown.

Noting that a section of the government, too, had called for the lockdown, State Minister Cabraal urged all stakeholders to examine the situation in its entirety without focusing on selected factors.

The Island: State Minister, you emphasised several times how lockdown undermined the national economy. You also pointed out difficulties caused by it. However, the government not only declared a lockdown on August 20 for ten days, but extended it till Sept 6. Did you ask/advise the administration against it?

State Minister: Medical authorities have been constantly requesting the lockdown of the country in order to deal with the pandemic. Unfortunately, the counter argument setting out the economic damage that is caused as a result of such closure has not been presented adequately. That is why it’s important that the facts, figures and impact of a lockdown are known and understood, so that more informed decisions can be made in the future.

The Island: In 2018 and 2019 govt collected over Rs 1,900 as revenue. But, that figure dropped to little over Rs 1,300 bn in 2020. Can you blame that on Covid because the Opposition says the government lost over Rs 500 bn by doing away with a spate of taxes on addition to the reduction of duty on sugar to 25 cents from Rs 50 per kilo?

State Minister: In 2019, the government had estimated to collect about Rs. 2.2 trillion as revenue. However, due to the sharp contraction of the economy following the massive Easter Sunday carnage that sent shock waves across the world and debilitated the country’s vibrant tourism industry, the actual revenue dropped drastically to about Rs. 1.9 trillion only: a decrease of about Rs. 0.3 trillion! Hence, it was clear that the abnormally high rates of income taxes, VAT and other duties were counterproductive and were not yielding the estimated results. That is why the new government reduced the tax rates so that the business sector could be given a boost to grow fast and the economy could revive and recover. In fact, ifhad the government not reduced taxes at that time, the entire business sector would have collapsed because by that time, businesses were stagnant due to the high interest rates and high taxes. Unfortunately, however, the progressive policy measure of lowering all taxes including customs duties, did not lead to the intended consequence of the expected stimulation of the economy mainly due to the pandemic effect and lockdown. However, it must be said that the economic fallout from the pandemic would have been a lot worse and people driven to severe poverty and despair had the taxes not been reduced by end 2019. In fact, in such a scenario, the entire country may have even come to a grinding halt, with the industries and services sectors collapsing.



News

Stay on course and don’t go back to the past – Dr Indrajit Coomaraswamy

Published

on

By

Former Governor of the Central Bank delivering the keynote address at a high profile Webinar hosted by the Central Bank of Sri Lanka today (24)  said that Sri Lanka must implement the structural reforms proposed by the International Monetary Fund (IMF) without relaxing like in the past or else we will be in a deeper economic mess.

The webinar was titled ‘What is next for Sri Lanka in the wake of the IMF programme’

Continue Reading

News

Sustainable economic development goals cannot be achieved unless attention is paid to mitigating climate change – Sagala Ratnayake

Published

on

By

President’s Senior Adviser on National Security and Chief of Presidential Staff  Sagala Ratnayake said sustainable economic development goals cannot be accomplished without taking steps to mitigate climate change.

He said this while participating in the 10,000 sapling planting program organized by the LEO Youth Vision 2048 Club and the LEO Club at the Royal College, Colombo on Thursday (23rd).

This program was organized in view of President Ranil Wickremesinghe’s birthday, which is today (24), and the required plants were distributed to the main schools of the Colombo District.

Continue Reading

News

SF claims thousands of police and military personnel leaving

Published

on

By Saman Indrajith

Thousands of police and military personnel had left the services recently as they did not want to carry out illegal orders, Field Marshal Sarath Fonseka told Parliament yesterday. According to the war-winning army commander 200 policemen have resigned during the past two months and 25,000 soldiers have left the army during the last two years.

“We urged the law enforcement and military officials not to follow illegal orders. We will reinstate them with back pay,” he said.

Fonseka also urged the President and the government MPs not to take people for fools.

“Sri Lanka owes 55 billion dollars to the world. Ranil’s plan is to borrow another seven billion during the next four years. So, in four years we will owe 62 billion to the world.

Ranil and his ministers ask us what the alternative to borrowing is. These are the people who destroyed the economy and society. They must leave. Then, we will find an alternative and develop the country,” he said, adding that the IMF loans had made crises in other nations worse.

“Ranil says that by 2025, we will have a budget surplus as in Japan, Germany and South Korea. These countries are economic power houses, and this comparison is ludicrous.”

Continue Reading

Trending