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Thursday June 20th, 2024

Sri Lanka public sector ‘unbearable burden’: Finance Minister

ECONOMYNEXT – Sri Lanka’s public sector which has become an “unbearable burden” on the economy, Finance Minister Basil Rajapaksa said Saturday after bringing a budget proposal to increase the retirement age.

Explaining his maiden budget unveiled in parliament Friday, Rajapaksa said there will be no salary increases for the 1.42-million-strong state sector employees as the government struggled to pay their salaries.

Increasing the retirement age however will nix any chance of trimming the public sector by attrition.

The minister said new recruitment will be carried out only to fill vacancies created by retirees.

However, with the increase of the mandatory retirement age of the public sector by five years to 65, no public servant has to retire till November 2026.

“For at least one more year, there is absolutely no way we can spend public money on government sector employees,” Rajapaksa said.

Sri Lanka’s public sector is regulated expanded unemployed graduates, educated at tax payer funded state universities, who cannot find jobs in productive sectors.

President Gotabaya Rajapaksa after slashing valued added taxes in December 2019 to build a ‘production economy’ hired 53,000 graduates in to the public sector and set up a Multi-Purpose Development Task Force to hire another 100,000 workers who had passed Grade 8 to ‘reduce poverty’.

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Sri Lanka to expand public service by over 10-pct in 2020, 53,000 graduates

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In 2020, 86 percent of all taxes collected from the people went to pay for salaries and pensions.

In his budget speech Finance Minister Rajapaksa had allocated an addition 30,000 million rupees to address the salary anomalies of teachers who recently went on strike to press their demands to get what was due to them.

Rajapaksa said increasing the retirement age was a concession to the public sector.

“The public sector has expanded so rapidly that they have become an unbearable (uhu-lun-ner barry) burden. There is no need to give them lozenges. We must honestly accept, that this public sector is a burden (bu-ruck) to the country ,” he said.

“To give benefits to the public sector we have to take money from the public.”

He said there was one public servant for 113 citizens at the time of Sri Lanka gaining
independence from Britain in 1948, but the civil service has expanded and the ratio was now 1 civil servant for 13 citizens.

In 2020 and 2021 Sri Lanka printed money to finance the deficit and also keep rates down and the country is now facing forex shortages, the rupee is under pressure and inflation is rising (COLOMBO, November 13, 2021)

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Sri Lanka stocks close up, JKH trade pushes turnover

ECONOMYNEXT – The Colombo Stock Exchange closed up on Thursday, data on its site showed.

The broader All Share Index closed up 0.19 percent, or 23.11 points, at 12,249; while the more liquid S&P SL20 Index closed up 0.15 percent, or 5.33 points, at 3,610.

Turnover was 2 billion. Nearly half of this (Rs980mn) came from a crossing on John Keells Holdings Plc. The share closed down at 202.00.

“There were several crossings today which pushed turnover,” market participants said.

“Institutions and high net-worth activity drove the market, while the retail investors we feel are still about uncertain and adopting a wait-and-see approach.”

Melstacorp Plc was among the companies that saw active volumes (Rs194mn) in the day. The share closed up at 87.10.

Top contributors to the index included TeeJay Lanka Plc (up at 41.70), Sampath Bank Plc (up at 79.50), Hatton National Bank Plc (down at 201.00). Hayleys Plc (up at 105.00) and its subsidiary Hayleys Fabric Plc (up at 46.60) were also positive contributors. (Colombo/Jun20/2024)

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Sri Lanka, India launch maritime rescue coordination centre

ECONOMYNEXT – Sri Lanka’s president Ranil Wickremesinghe and visiting Indian External Affairs Minister S Jaishankar marked the formal commissioning of a Maritime Rescue Coordination Centre in the island nation on Thursday.

The MRCC was constructed with a 6 million dollar grant from India.

It includes a centre at Navy headquarters in Colombo, a sub-centre in Hambantota and unmanned installations at Galle, Arugambay, Batticaloa, Trincomalee, Kallarawa, Point Pedro and Mollikulam.

Wickremesinghe and Jaishankar also launched, virtually, 106 houses in Kandy, Nuwara Eliya and Matale under the Indian Housing Project. 24 houses in each model village were handed over.

Jaishankar called on President Ranil Wickremesinghe at the President’s House earlier in the day for a one-on-one meeting, the president’s media division said.

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Indian FM Jaishankar in Sri Lanka to discuss partnerships amid project delays, ahead of polls

Jaishankar’s one-day official visit to Colombo was to discuss “wide-ranging issues of the partnership”, India said, amid delays of some key Indian projects ahead of a presidential poll in Sri Lanka. (Colombo/Jun20/204)

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Sri Lanka, Saudi Arabia to cooperate in promoting direct investment

ECONOMYNEXT – Sri Lanka and the Kingdom of Saudi Arabia will sign a memorandum of understanding for cooperation in promoting direct investment, Cabinet spokesman minister Bandula Gunawardena said.

“Both sides reached an agreement,” during the special meeting of the World Economic Forum held in Riyadh, Saudi Arabia, Gunawardena told reporters on Thursday.

The agreement “aims to attract direct investment to the country and improve the investment environment of both countries through policy and legal reforms, provision of advanced and integrated infrastructure, process redesign, etc.”

Sri Lanka lagged behind regional nations in attracting foreign direct investment, the minister said. “Compared to Singapore which last year attracted FDIs of 140 billion dollars, India 70 billion dollars, Vietnam 28 billion dollars, and Thailand 20 billion dollars, Sri Lanka only attracted 1 billion dollars.”

“We hope for foreign investments in a big way, to solve our balance deficit crisis.” (Colombo/Jun20/2024)

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