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PM pledges to reduce budget deficit from 10% to 4% by 2025

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By Saman Indrajith

Prime Minister Mahinda Rajapaksa yesterday (12) asked Parliament to increase the borrowing limit by Rs.180 billion while amending the guarantee limit to 15 percent of the GDP as stated in the Fiscal Management (Responsibility) Act.

Presenting the Appropriation Bill 2020 to the House, the Premier said that the government aimed to reduce the income-expenditure gap to 4 percent of GDP by 2025 which now stood at nearly 10 percent and to reduce the overall debt to GDP to 75 percent of GDP within the next four years.

“It has become a national need to change our mindset to have faith in a production economy that supports exports and domestic production capabilities with fewer imports. A market economy that is dependent only on tea and apparels, with imports which are twice our exports without value additions to local resources and raw materials, will not pave the way for sustainable development. Development aspirations of the people could not be met depending only on import-led consumption and industrialisation without focus on food security and agro industrialisation and allied services based on agriculture, fisheries and livestock development. We have to not only convert a negative economy into a positive high economic growth rate of 6 percent, but such growth should result in the eradication of poverty.”

PM Rajapaksa said that the government had already spent around Rs.70,000 million for identifying COVID-19 patients, quarantine, random testing and related welfare activities.

“Hospital capacity for disease prevention, which was limited to Colombo, has now been increased to 17 hospitals in less than a year covering almost all parts of the country. The number of special care beds for COVID-19 patients has been increased to around 600. Daily PCR testing capacity for the diagnosis of the disease has been increased to an average of 7,500-10,000 tests a day with each test costing around Rs. 6,000, with the daily expenditure exceeding almost Rs. 50 million. The government also spends a sizable amount for the food and welfare of those under 14-day quarantine. In the meantime, an allowance of Rs.5, 000 each is granted to low income families adversely affected by the COVID-19 pandemic. Besides, the government is also bearing expenses related to the payment of the allowances of public servants who are engaged in those services in addition to other health-related expenditure.”

“From 2020 onwards annually, foreign debt servicing amounts to approximately USD 4,200 million. I am happy to report to this House that we have settled all debt obligations including the foreign currency debt dues for the year 2020,” he said.

The Premier said that he would present the proposals to create a modern economy in the country through ‘Vistas of Prosperity’ in his budget speech 2021 to be delivered on 17 Nov. 2020.



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Economic crisis: 100,000 families already starving

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Govt. to provide monthly assistance package – official

By Ifham Nizam 

Plans are underway to assist an average needy family of  four with a monthly package of Rs. 15,000, a senior adviser to President Ranil Wickremesinghe said yesterday, adding that the move was expected to help ameliorate the plight of nearly 65,000 families.

Food Security Committee Chairman Dr. Suren Batagoda told The Island yesterday that at present some 100,000 families across the country were starving.

He said financial assistance would be provided to those families for three months. Within three months, the government would design a package in the form of food stamps, etc.

Dr. Batagoda said the World Food Programme, UNICEF, the World Bank, and state agencies would also team up to strengthen food security, focusing especially on needy pregnant mothers and pre-school children.

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GR govt. ignored Chinese lenders’ request for debt restructuring

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By Rathindra Kuruwita

The Gotabaya Rajapaksa government had ignored suggestions by Chinese lending institutions that Sri Lanka to restructure the debt in 2021, Prof. Samitha Hettige said yesterday.

“The Rajapaksa government started talking of debt restructuring earlier this year. The Opposition had been asking for this before,” he said.  By 2021, before the Gotabaya Rajapaksa administration decided on debt restructuring, the Chinese institutions that had given Sri Lanka loans suggested that a restructuring process should start since Sri Lanka would have trouble repaying the loans, the Strategic Studies scholar said.

However, the request had gone unheeded, and if the government had started discussions then, Sri Lanka would not have been in crisis, Prof. Hettige said.

The Sri Lankan foreign policy, in the last few years, had also been misguided, Prof. Hettige said. A number of Indian and Chinese companies faced unnecessary issues by the behaviour of the government, he said.

Prof. Hettige said that the government must focus on establishing free trade ports and reducing negative lists for investments.

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SJB dissociates itself from SF’s call for protest

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By Chaminda Silva

MP Sarath Fonseka’s call for people to join anti-government protests was not a decision taken by the Samagi Jana Balawegaya (SJB), party MP J.C Alawathuwala said.

The SJB believed that they had to help President Ranil Wickremesinghe stabilise the country, economically and politically, he said.

MP Alawathuwala said the President must be given some time to solve the problems faced by the people and that the SJB was holding discussions with the government to guide it on a people-friendly path.

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