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Monday June 27th, 2022

Sri Lanka state workers to get 5-year no pay leave in soft-peg collapse

ECONOMYNEXT – Sri Lanka’s state workers would be given five years of no-pay leave to go abroad or work elsewhere with no reduction in their seniority or pension rights, the state information office said, as the country suffers the worst currency crisis in the history of its central bank.

Sri Lanka’s state workers are now allowed 5 years of no pay leave to go abroad or study but many do not make use of it because they lose seniority and pension rights.

However Sri Lanka is now facing difficulties from raising taxes from the people amid a severe currency crisis which had depreciated the rupee from 200 to 380 to the US dollar.

Money printed to pay state worker salaries are also creating further foreign exchange shortages.

“Considering the prevailing economic situation in the country,” the Cabinet of Ministers approved the proposal by Public Administration Minister Dinesh Gunewardene to allow state workers to take five years of no-pay leave without affecting pensions or seniority, a government statement said.

A new circular would be issued giving effect to the proposal.

Sri Lanka has about 1.5 million public sector workers and about 86 percent of taxes collected from the people went for salaries in 2021 after a ‘fiscal stimulus’ which reduced state revenues.

Taxes are now being hiked and government bonds are being sold at 20 percent to avoid printing money. (Colombo/June14/2022)

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