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Friday March 1st, 2024

India’s fresh $500 mln fuel credit to Sri Lanka delayed over routine administration – minister

The last shipment under Indian credit line arrived in on June 16. There has been no shipment since then (img credit: Nazly Ahmed)

ECONOMYNEXT – A fresh $500 million Indian fuel credit line to Sri Lanka has been delayed due to some routine administration process among its bureaucracy though there has been no negative remarks about the new loan, Power and Energy Minister Kanchana Wijesekera said.

India has already lent $700 million – $500 million from the first fuel credit line and another $200 million from the credit line allocated for essential commodities – to buy fuel when the country had a foreign exchange crisis.

Sri Lanka is in discussion with India’s Exim Bank to borrow another $500 million as fuel credit, but Minister Wijesekera said the loan has yet to be materialized and facing some administration delays.

Minister’s comments come as Sri Lanka has no scheduled fuel shipment for the state-run Ceylon Petroleum Corporation (CPC) in the foreseeable future. The government has already asked most of its 1.5 million government servants to work from home while closed most of schools to save fuel by reducing transports.

“I don’t know the exact details, but there are questions being asked how we are going to pay the money back, because it’s a credit line,” Wijesekara told reporters at a media briefing in Colombo on Sunday (26).

“So the administration question that the Exim Bank and the central bank of India raised is the ability to pay back the loans.”

Sri Lanka has already declared sovereign debt default on April 12 and no foreign country is lending to Sri Lanka at the moment given its default rating by global rating agencies.

Sri Lanka has lost its option of 90-day and 180-day credits for fuel payment after the default. Government officials say the country has to make a payment first and order fuel unlike earlier and the stocks expected only after a few weeks.

Sri Lanka has been largely depending on India for fuel since late in March.

“Any financial institute, when they lending money they look at the possibility of how they are going to get paid back. Those are the administration questions that are being looked at,” Wijesekara said.

“But they have not communicated any negative remarks on Indian $500 million credit line. They are very positive about it. They have their own system on that. They have to sort them out internally. It is not just like Sri Lankan system. When your cabinet take a decision to extend it, they have their own system.”

“Of course, we have seen Prime Minister Narendra Modi, the foreign minister, the Finance Minister and everyone in the government have backed this credit line being extended to Sri Lanka. But when the do the extension, they have to do their administration routine finalizing.” (Colombo/June 27/2022)

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Sri Lanka’s RAMIS online tax collection system “not operatable”: IT Minister

ECONOMYNEXT – Sri Lanka’s online tax collection system RAMIS is “not operatable”, and the Ministry of Information Technology is ready to do for an independent audit to find the shortcomings, State IT Minister Kanaka Herath said.

The Revenue Administration Management Information System (RAMIS) was introduced to the Inland Revenue Department (IRD) when the island nation signed for its 16th International Monetary Fund (IMF) programme in 2016.

However, trade unions at the IRD protested the move, claiming that the system was malfunctioning despite billions being spent for it amid allegations that the new system was reducing the direct contacts between taxpayers and the IRD to reduce corruption.

The RAMIS had to be stopped after taxpayers faced massive penalties because of blunders made by heads of the IT division, computer operators and system errors at the IRD, government officials have said.

“The whole of Sri Lanka admits RAMIS is a failure. The annual fee is very high for that. This should be told in public,” Herath told reporters at a media briefing in Colombo on Thursday (29)

“In future, we want all the ministries to get the guidelines from our ministry when they go for ERP (Enterprise resource planning).”

President Ranil Wickremesinghe’s government said the RAMIS system will be operational from December last year.

However, the failure has delayed some tax collection which could have been paid via online.

“It is not under our ministry. It is under the finance ministry. We have no involvement with it, but still, it is not operatable,” Herath said.

“So, there are so many issues going on and I have no idea what the technical part of it. We can carry out an independent audit to find out the shortcomings of the software.”

Finance Ministry officials say IRD employees and trade unions had been resisting the RAMIS because it prevents direct interactions with taxpayers and possible bribes for defaulting or under paying taxes.

The crisis-hit island nation is struggling to boost its revenue in line with the target it has committed to the IMF in return for a 3 billion-dollar extended fund facility. (Colombo/Feb 29/2024) 

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Sri Lanka aims to boost SME with Sancharaka Udawa tourism expo

ECONOMYNEXT – Sri Lanka is hosting Sancharaka Udawa, a tourism industry exhibition which will bring together businesses ranging from hotels to travel agents and airlines, and will allow the small and medium sector build links with the rest of the industry, officials said.

There will be over 250 exhibitors, with the annual event held for the 11th time expected to draw around 10,000 visitors, the organizers said.

“SMEs play a big role, from homestays to under three-star categories,” Sri Lanka Tourism Promotion Bureau Chairman, Chalaka Gajabahu told reporters.

“It is very important that we develop those markets as well.”

The Sancharaka Udawa fair comes as the Indian Ocean island is experiencing a tourism revival.

Sri Lanka had welcomed 191,000 tourists up to February 25, compared to 107,639 in February 2023.

“We have been hitting back-to-back double centuries,” Gajabahu said. “January was over 200,000.”

The exhibition to be held on May 17-18, is organized by the Sri Lanka Association of Inbound Tour Operators.

It aims to establish a networking platform for small and medium sized service providers within the industry including the smallest sector.

“Homestays have been increasingly popular in areas such as Ella, Down South, Knuckles and Kandy,” SLAITO President, Nishad Wijethunga, said.

In the northern Jaffna peninsula, both domestic and international tourism was helping hotels.

A representative of the Northern Province Tourism Sector said that the Northern Province has 170 hotels, all of which have 60-70 percent occupancy.

Further, domestic airlines from Colombo to Palali and the inter-city train have been popular with local and international visitors, especially Indian tourists. (Colombo/Feb29/2024)

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Sri Lanka rupee closes at 309.50/70 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 309.50/70 to the US dollar Thursday, from 310.00/15 on Wednesday, dealers said.

Bond yields were slightly higher.

A bond maturing on 01.02.2026 closed at 10.50/70 percent down from 10.60/80 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.10 percent from 11.90/12.00 percent.

A bond maturing on 01.07.2028 closed at 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.30/45 percent up from 12.20/50 percent.

A bond maturing on 15.05.2030 closed at 12.35/50 percent up from 12.25/40 percent.

A bond maturing on 01.07.2032 closed at 12.55/13.00 percent up from 12.50/90 percent. (Colombo/Feb29/2024)

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