ECONOMYNEXT – President Ranil Wickremesinghe’s budget proposals are aimed at elections, with questions arising on their feasibility, but can also be seen as an attempt to take the economy in the right direction amid challenges, Sri Lanka opposition MP Harsha de Silva said.
“The president did this from a very difficult place; we need not be disingenuous about that. But the question is, what is the ground reality? People are struggling to live. Even if all this is correct, how do you implement it? That’s where the problem is,” de Silva said, speaking to reporters at the end of the budget presentation in parliament on Monday November 13.
The main opposition Samagi Jana Balawegaya (SJB) legislator said the budget clearly signals a coming election in 2024.
“The president has announced many things to be given, including a 10,000-rupee salary increase. But that won’t be till April; so I think there will be an election between April and October,” he said.
The MP, widely seen as the SJB’s leading voice on economic policy, acknowledged that the economy has to be reformed rigorously, requiring “very serious restructuring”.
The chains that have shackled the country must be broken, he said.
“Although the president didn’t mention it today, there is also the proposed VAT increase via gazette. Exemptions given to mechanical equipment and other things will now be removed.
SMEs won’t be able to do a thing,” said de Silva.
With the proposed 3-percent VAT hike on the hand hand, and the social security levy threshold dropping from 120 million rupees to 60, small and medium enterprises (SMEs) are going to face a tough time, he said.
“VAT is charged if it’s 80 million a year, which has also been brought down to 60. The president didn’t talk about these things.”
“This is like a plane flying in a certain direction. If there is massive turbulence, there is a chance the plane will crash. The probability of this plane crash is very high,” he said.
The MP said, however, that he understands the president’s predicament.
“I sympathise with the president [and recognise] that this is not an easy budget to do. But the heavy burden felt by the people is not being reduced,” he said.
“Will the private sector be able to get at least 10,000 rupees in salary increase?”
MP de Silva also questioned the proposed increase in the borrowing limit from 3,900 billion rupees to 7,350 billion.
“Where do we get those loans? What will happen to interest rates? I will analyse this tomorrow, but I see this as a budget aimed at an election,” he said. (Colombo/Nov13/2023)