State Minister Dr. Nalaka Godahewa told the parliament on Saturday (21) the government launched a pragmatic programme to lift millions of people from poverty. The minister said that when one member of a family under extreme poverty received a permanent employment opportunity, the entire family achieved some degree of economic stability. The 100,000 jobs programme aimed to achieve that objective. Rs. 4,000 grant for vocational trainees also aimed to give opportunities for the youth of poor families, the minister said.
Dr. Godahewa said: “At the time of the 2015 regime change, I was serving as the Chairman of Securities and Exchange Commission of Sri Lanka which regulates Colombo Stock Market. Generally, Stock market is considered to be the barometer of any economy. Because investor confidence and stock market indices have a direct correlation. Typically the market slumps when investor confidence shatters.
During the post war period between 2010 and 2015, market capitalization of Colombo stock market jumped by 535% and as a percentage of GDP it increased from 11% to 36%. All Share Price Index (ASPI) gained 255% during that period. Colombo stock market had even won accolades as the most promising and sustainable stock market in Asia.
The IMF in its report dated 29 June 2014 identified Sri Lanka as one of the fastest growing economies of Asia. International rating agency Moody’s in July 2014 stated that the strength of the Sri Lankan economy is reflected in its increasing per capita income and global competitiveness index rating.
By this time Sri Lanka was holding Asia’s 1st or 2nd positions in almost all key economic indicators. In 2014 GDP grew by 6.8%. Total GDP (Gross Domestic Product) in 2014 was US Dollars 80 Billion and Central Bank of Sri Lanka (CBSL) forecast was Sri Lanka GDP to reach USD 163 Billion by 2020. Per Capita Income of US Dollars 3,654 in 2014 was anticipated to reach USD 7,500 by 2020.
Unfortunately the ones, who are trying to teach us economic management sitting in the opposition benches today, are the same people who came to power in 2015 January. The opposition had similar arguments and criticisms before 2015 as well. But when they came to power, as a group they proved how incompetent they are. Economic growth slumped year after year.
2015 it came down to 5%
2016 it further reduced to 4.5%
2019 2.1 %
Though we anticipated per capita income to reach US Dollar 7,500 by 2020, it stagnated at USD 3,852 by end of 2019. GDP Per Capita didn’t even gain by US Dollar 50 in 2019.The first finance minister of the Yahapalana government Ravi Karunanayake in 2019 made a public statement that the country was heading towards bankruptcy. With that kind of economic collapse and a trend, the economic growth rate would have been a negative figure with or without Coronavirus pandemic.
Unfortunately, it is such a team of losers who are trying to teach us economic management today in this parliament.
The reasons for their failures are obvious. They didn’t have a common vision or a program as it was just an unholy coalition consisting of ad hoc political groups formed merely to defeat Mahinda Rajapaksa.
Our government’s approach to economic management is completely different. We have a clear economic vision. That is people centric economic policy articulated in His Excellency President’s “Vision for Prosperity and Splendor” framework.
A National budget should be formulated based on a government policy framework. Yahapalanaya had 10 policy statements for their 5 years. Budget speeches were prepared based on the serving finance minister’s will but not based on any stipulated economic policy.
One has to first read the “Vision for Prosperity and Splendor” policy framework in order to understand the crux of this budget that we are debating. Then it would become a no-brainer to understand the concepts behind these budget proposals.
I would like to elaborate a bit more on this.
Vision for Prosperity policy statement has a 10 pillar policy framework. What are those 10 policies?
Priority to national security
Friendly, non-aligned foreign policy
An administration free from corruption
New constitution that fulfills people’s wishes
Productive citizenry and vibrant human resources
People centric economic development
Technology based society
Development of physical resources
Sustainable environmental management
Disciplined , law abiding and value based society
If these budget proposals are thoroughly analyzed, one could realize that the due attention has been paid to all ten areas. Each and every budget proposal is allied to one or more policies.
If I take a simple example, the increasing of retirement age in the private sector to 60 years comes under “a productive citizen” policy. Re-forestation programme and 2 million trees planting along the roadways come under “Sustainable Environmental Management” policy. Rs.20,000 million allocation for national security is due to its utmost importance. Allocations of Rs. 10,000 million for technology parks and Rs. 8,000 million for digital infrastructure are based on our “Technology based society” policy. 100,000 kilometers of rural road construction with an investment of Rs. 20,000 million and allocation of Rs. 8,000 million for improving rural schools is due to our priority policy for the “Development of physical resources”.
Since we are debating national budget proposals, for a moment let’s explore what is meant by people centric development. After receiving a historic mandate, His Excellency in his inaugural speech in this parliament articulated 4 priority areas of his economic policy.
Firstly, finding solutions for the eradication of poverty
Secondly, creating equal opportunities for everyone to prosper
Thirdly, ensuring an administration free from corruption
Fourthly, encouraging and strengthening local entrepreneurship
In some cases the reason for poverty is the landlessness and in turn, their inability to cultivate economic crops. As outlined by the President in his address to the nation yesterday, the objective of giving one acre each for 20,000 families is to achieve this objective. Everyone should have an opportunity to prosper in a people centric economy and it is the responsibility of the government to remove roadblocks for the same. Higher education doors should be opened to all youth and we should create a conducive environment to produce more and more entrepreneurs amongst them.
That’s why we have paid special attention to expand the capacities and reform curriculums in universities and vocational training institutes in this year’s proposals. City campuses are being initiated based on these objectives. This budget has provisions to increase the intake for vocational training institutes from 100,000 to 200,000.
Today many countries have leveraged technology to uplift the productivity of the government. Hence a special attention has been paid in this budget to foster the technology usage in the government sector. Online tax administration process and e-filing of corporate taxes are good examples.
Private sector has a vital role to play in the economic development process. This budget has several proposals to uplift the local entrepreneurs. Special tax concessions have been granted for agriculture and fisheries sectors. Students who enroll for vocational training are encouraged to start a business by offering Rs. 500,000 loan at concessionary interest rates.
COPA questions lion’s share of fines going to Customs
Irregularities, lapses, corruption erode public finance
By Shamindra Ferdinando
The Committee on Public Accounts (COPA) has summoned the Inland Revenue Department tomorrow (23) for an inquiry regarding the inordinate delay in collecting taxes amounting to billions of rupees and extraordinary payments made to the officers of the Customs Department out of fines imposed on both public and private sector enterprises.
Besides, a COPA sub-committee is inquiring into revenue losses suffered over the years as a result of releasing vehicles imported for special purposes as dual-purpose vehicles.
SLPP MP Prof. Tissa Vitharana heads the all-party watchdog committee.
Secretary General of Parliament Dhammika Dasanayake in a statement issued on April 19 through the Communication Department of the Parliament said that Committee on Public Enterprises (COPE) and COPA summoned four enterprises. COPE called the Sri Lanka Football Federation and the National Film Corporation on April 22 and 23, respectively. The COPA summoned the Wildlife Conservation Department and the Inland Revenue on April 21 and April 23, respectively, Dasanayake said.
COPA has fixed the meeting in the wake of disclosure of major shortcomings in the overall revenue collection process. Following COPA meeting Inland Revenue Chief H.M.C. Bandara on March 10, the watchdog committee called for accelerated measures to recover dues. The COPA pointed out that out of Rs 107 bn due to the government, only Rs 224 mn had been recovered so far, immediate measures were required to collect taxes and fines.
At the same meeting, the COPA, having questioned the correctness of a list containing tax defaulters furnished by the Inland Revenue Department, emphasized the pivotal importance of rectifying the shortcomings. The COPA also raised the practicability in recovering taxes in terms of the data provided by ‘Legacy’ and ‘RAMIS’ computer systems.
The Inland Revenue Commissioner General lamented before COPA how inordinate delay in legal proceedings thwarted their efforts to recover taxes. The COPA assured that the Justice Ministry and the Finance Ministry would be summoned for a meeting along with the Inland Revenue Department to explore ways and means of overcoming the issue at hand.
At a subsequent COPA meeting held late March, it was revealed that in addition to their failure to recover taxes amounting to Rs 2,670 mn due from casinos, the Inland Revenue received 6,878 dishonored cheques to the tune of Rs 2,451,465,383. COPA members present on this occasion included Dayasiri Jayasekera, Lasantha Alagiyawanna, Dr. Sudarshani Fernandopulle, Tissa Attanayake, Mohamed Muzammil, Niroshan Perera, Dr. Upul Galapatti, Dr. Harini Amarasuriya, Cader Mastan, S. Sritharan and Weerasumana Weerasinha.
That particular meeting was also told that the amount of collectable taxes in terms of the ‘Default Taxes (Special Provisions) Act No 16 of 2010 (certified on Dec 07, 2010) amounted to a staggering Rs 144.5 bn.
COPA and the Consultative Committee on Ports and Shipping had also taken up on March 9 and 24 the highly contentious issue of the Customs officers taking a big share of fines imposed on tax defaulters, both public and private sector. COPA pointed out that the Customs took advantage of the provision that 50 per cent of the fines imposed on defaulters were shared among those involved in a particular detection. COPA has discussed two specific issues in this regard. COPA pointed out that the allocation of 50 per cent of a fine received from the Sri Lanka Ports Authority (SLPA) for defaulting in respect of gantry cranes to Customs officers was a major problem. COPA focused on taking necessary measures in this regard after having discussed the matter with relevant authorities, including the Treasury Secretary S.R. Attygalle.
COPA pointed out how out of Rs 205 mn fine imposed on Lanka Coal Company (Pvt) Limited for defrauding taxes, Rs 102.5 mn (50 per cent of the total amount) had been distributed among Customs officers as rewards and Rs 41 mn for their welfare (20 per cent) thereby leaving the government with only Rs 61.5 mn. COPA has directed Treasury Secretary Attygalle to conduct a fresh inquiry into this and take tangible measures to prevent similar malpractices in the future.
COPA investigations have also revealed massive racket in the registration of ‘dual purpose’ vehicles. It revealed that as a result of corrupt elements since 2013 registering vehicles imported for special purposes as ‘dual purpose’ vehicles the Treasury lost taxes amounting to Rs 220 mn.
In addition to that the Treasury had been also deprived of taxes amounting to Rs 1.300 mn by not imposing Rs 3 mn each on 443 special vans brought to the country during 2010-2019 period.
COPA also stated that the Customs perpetrated another massive fraud by allowing the import of 10 vans and 414 lorries as special purpose vehicles during 2010-2014.
COPA reported the Customs imposing Rs 1.5 mn tax on a super luxury car instead of legitimate Rs 56 mn.
It revealed the loss of revenue to the tune of Rs 6.1 bn during 2013-2016 period due to the Customs adopting wrong procedure in respect of large quantities of palm oil imports by two enterprises. The watchdog committee has instructed the Customs to expedite measures to recover the dues from those companies.
India reiterates commitment to Sri Lanka’s security
India has reiterated her support for Sri Lanka’s fight against terrorism. The assurance was made on the second anniversary of 2019 Easter Sunday attacks. The following is the text of statement issued by the Indian High Commission yesterday: “High Commissioner Gopal Baglay attended the solemn ceremony at St. Anthony’s Church on 21 April 2021 to mark the second anniversary of the dastardly Easter Sunday attacks. He lit a candle in memory of the victims of the attack and prayed for the recovery of those who are still suffering from its aftermath.
“It may be recalled that the High Commissioner had paid homage to the victims at the Church also on 23 May 2020, the first day after the completion of the mandatory 14-day quarantine period, subsequent to his arrival to Sri Lanka on 8 May 2020 on a special flight carrying a gift consignment of essential medical supplies from India. Prime Minister Narendra Modi had also paid his respects at the Church during the solidarity visit to Sri Lanka in June 2019.
“St. Anthony’s Church was one of the multiple targets of the Easter Sunday attacks, which also took away the lives of 10 Indians. These Indian victims fell prey to the perpetrators at Shangri-la, Kingsbury and Cinnamon Grand Hotels.
India and Sri Lanka cooperate closely in all aspects across the security spectrum. India stands firmly with the people and Government of Sri Lanka in the fight against terrorism and also collaborate on curbing various other illegal activities, such as drug trafficking, narcotics, etc. “
Explosive cargo: Ship carrying compound used for enrichment of uranium asked to leave H’tota port
A ship that made an emergency call at the Hambantota International Port on Tuesday night (20) carrying Uranium hexafluoridea–a compound used in the process of enriching uranium, which produces fuel for nuclear reactors and nuclear weapons–has been asked to leave.
Chandula Rambukwella, Senior Manager, Commercial & Marketing, Hambantota International Port, issued the following statement yesterday: “M.V. BBC Naples sailing under the flag of “Antigua & Barbados” entered the port of Hambantota on 20th April at 2100 hrs, while en route from Rotterdam to China. The ship made an emergency call at the port for some urgent repairs. Agents for the vessel in Sri Lanka, Ms. Barwil Meridian Navigation, had not declared to the port authorities that there was dangerous cargo on board, prior to the vessel entering the port.
It was later found that they were carrying a cargo of Uranium Hexafluoride via investigations made by the Sri Lanka Navy and the Port Authority. The vessel was required to leave the port no sooner the facts were verified.
The SLPA, Navy, and Customs officials had approved all the necessary documentation prior to berthing of the vessel, based on the declaration made by the agent. The Navy and Customs were present at all times to ensure that there wasn’t any cargo unloaded onto the Hambantota International Port premises.”
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