28 October, 2020

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Money Power Of Provincial Councils

By S.Sivathasan –

S.Sivathasan

When the poverty of the Provinces is seen in contrast to the seeming affluence of the Centre, the salient feature that emerges is that poor Provincial Councils and a not so poor Centre coexist without disharmony. The Councils do not ruffle the Centre and the latter keeps the former in good humour. Since both are of the same feather sitting together is not irksome to either. Only the ninth will be different. One relishes champagne and the other partakes of toddy with  ill will to none.  Knowledge of reality may cause disquiet.

To write about, does money power exist in the Provinces? the cynic would inquire. He may be called candid and realistic. Truth will emerge when the figures of 2012 are examined.

Tax revenue for the nation was Rs. 1.035 trillion. For nine Provincial Councils it was Rs, 41 billion equivalent to 3.9% of the nation’s. What does it connote? The tax base permitted for the Councils can generate only that much and no more. The centre’s 96.1% share flows from the policy of centre takes all. Do the Councils know precisely of this cavalier treatment?

Central government transfers to the Councils totaled Rs. 112 billion. Of this amount Rs. 101 billion was for personal emoluments. This payment is mandatory giving the Councils no flexibility for redeployment. Neither increase nor decrease is practicable

Central government’s total expenditure for the year was Rs.1.540 trillion. One would point out that of this amount Rs. 408 billion was for Interest Payment. True, but how much of this was on borrowings for capital works in the Provinces?

Total expenditure of the Councils was Rs. 159 billion. Of this amount, recurrent consumed Rs. 136 billion (emoluments included). The Councils have only limited flexibility for redeployment of  Rs. 35 billion after salaries are paid..

Allocation for capital was Rs. 23 billion. It averages Rs. 2.5 billion which is a meager sum compared to  massive expenditure incurred on a huge officialdom.

Figures may be easily remembered when they are rounded off as 100 billion and 60 billion for recurrent and capital put together. These are not astounding figures, only a paltry sum when measured by purchasing power.

Provincial Councils were established in 1988. After an existence for 25 years how much has their financial muscle grown? A comparison for two years would suffice. For 2011 it was Rs. 157 billion and for 2012 Rs. 159 billion.

National totals do not provide a good picture because of disparities among Provinces. A few variations in tax collection may be cited. In 2011 the Western Province collected Rs. 24.5 billion, North Central Province Rs. 1.9 billion and Northern Province the lowest at Rs.81 million. Grant from the central government plus revenue totaled Rs.35.5 billion for WP, Rs 13.9 billion for Sabaragamuwa and NP at the ninth place with Rs. 10.6 billion.

In contrast, allocations for Defence were: 2012 Rs.207 billion and 2013 Rs. 247 billion. The year on year increase is Rs.40 billion and capital allocation for nine Provinces is Rs. 23 billion with single digit annual incremental growth.

Without the wherewithal no Province has thought of an iconic project like a satellite city or a new Provincial capital. What a sad commentary that 200 council years have not produced a single project of note. Twenty five years have seen only a holding operation. To think large finances have to be placed in Provincial hands.

The Provincial Councils to create an impact need money in ever increasing volume. Money means power and power gives prestige. So those at the highest levels of governance have no inclination to share power let alone part with. Overweening patriotic fervor is needed to place the nation above self. The absence of it sees the Provinces emasculated and the Centre impoverished. When the Provinces grow the nation will prosper.

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Latest comments

  • 1
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    True devolution would involve the PC’s in all development activities under their purview. At least 50% of the budget must be channeled through the PC’s.

    Policy, Planning, Legislation and Supervision can be from the center but the provinces must involve in developing their own services and infrastructure. This would endow the people at the pheriphery with the fruits of freedom and sovereignity. Provinces will be able to develop their own competencies and capacity to handle even larger development projects within their boundaries. People will be able to find employment in their own areas.

  • 1
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    Thanks. You have exposed the fundamental weakness that renders the PC system impotent. In addition financial authority is vested in the Governor. Both combined make the provincial cabinet and council impotent. Of course, while the PCs per se do not have the money or the power to deliver what they were intended to, they permit sinecure- white and black- for those warming chairs in these councils. They do not wield power, but become power brokers. The northern and eastern provinces have also have very much limited tax bases in the context of the post-war scenario, compared to the other provinces. The consequence of this would be to make a terrible situation horrendous. Unless, there is unprecedented periphery-centre cooperation, the northern PC, the only one with an party in the opposition ensconced, will become the breeding ground for additional frustration and discontent. It is futile to seek hope and solace in what is bound to be definitely a hopeless situation, unless preemptive steps are taken to find a way out of the impending hopelessness.

    Dr.Rajasingham Narendran

  • 1
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    The financial figures are quite bizarre, how can PCs manage their expenses with this scant money. Most of the money, I believe bulk of the rupees goes to paying salaries of PC members and officials.

  • 1
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    A good analysis, yes, with a bit of Sri Parthasarathy (1983/4)[or was it Indian High Commission’s then First Secretary?] touch in it.

  • 0
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    Mr. Sivathasan appears to be all over the place in recent days. The Government is thinking of annuling the land and police powers currently enjoyed by the Provincial Councils on paper under a so called 19th Amendment. It also plans to appropriate 6,000 odd acres of private Tamil land near Kankesanthurai/Palaly. It is appropriating more Tamil land elsewhere. There is backing at the highest levels for the BBS and its campaign against Muslims. Meanwhile, Mr. S is talking about provincial council finance!Hello?? Reality check?? Wake up and smell the coffee, Sir.

    I have been reading Mr S’s recent flurry of articles. He talks of a Marshall Plan, of India having ‘let down the Tamils’, of a ‘Tamil need’ to cultivate China (you mean – China choose the Tamils over Colombo given its strategic interests in the Indian Ocean sea lanes???) etc and then backtracking to say that ‘all hope is lost’ and that ‘we’ need to instead focus on economics. Let the younger generation who opted to stay behind in Sri Lanka take the lead to clean up the mess the likes of Mr. S’s generation created. We need a change of intellectual guard – not retirees who were part of the problem in the first place preaching from far away.

  • 0
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    PCs were not invented by people of Sri Lanka. They were forced on people of Sri Lanka by India as a solution to stop the internationalized internal war. The Indian solution failed to stop the war but created monsters in other provinces as well with increased recurrent expenditure. Now we have two public service commissions, two health authorities, two school authorities two road authorities, and so on. Mr. Sivathasan’s argument that only Rs. 35.00 billion is left for PCs after meeting the recurrent expenditure has to be viewed in the context of duplicity.

    Secondly, upgraded road transport between provinces and ICT integration have brought the provinces closer and due to this operational efficiency of networks of banking, trade and commerce has increased by many folds. Rest houses provided by the government for public servants stay while on official tours are a thing of past. They are now offered for “short term stay” during the day time because even the courting couples are very busy, whether in the North or in the South. There is no necessity for public servants to go on circuit like those days if simple management tools are used with ICT.

    Civic minded professionals and bureaucrats need to start reviewing the PC system in the background of productivity in the first place and secondly on urban dominated life styles in rural areas. The impact of the second can already be seen in the number of schools, hospitals and cooperative societies and small irrigation tanks etc. etc. abandoned in rural areas.

    In the light of this reality why are we still promoting devolution and 13th Amendment to the constitution? Funds can efficiently be channeled to rural areas by empowering the Local Authorities and District and Provincial Development Committees comprising elected heads of local authorities ill be able to decide on allocations within policy frameworks of national and regional development plans.

    So I kindly request Mr. Sivathasan to have a second look at his argument by using a good set of indicators rather than playing with numbers.

    • 0
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      Sri Lanka though a small country has a diverse geography. It is several countries within one . This has also led to a diversity in cultures, economic activities, the nature of agriculture and prosperity, The communal distributions of people is incidental and of less significance. The mistake made starting in the colonial era was to classify people as linguitic and religious communities . This had planted the seeds for the current conflict and communal posturing. The communal aspect should be deemphasised, while the area-wise diversity should be catered for. Each geographic area has unique needs and these have to be addressed, within the context of an all encompassing national need. The area-wise needs can be perceived and addressed by only local political mechanisms, interests and persons. This is where meaningful devolution of political power becomes imperative. Administrative decentralisation will not be effective without the local political input and control.

      Further, if we can accept everything else that has been thrust on us over the centuries and even millennia, by force or otherwise, why is there resistance to the concept of devolution? India thrust a very diluted devolution concept on us, because our problems were becoming her problem and we were refusing to resolve our problems. It was an event we brought upon ourselves. Now that it is here, why not accept it and make it work or even tailor it meet our needs better, rationally. We cannot insist on continuing to be lunatics in a world that is becoming a global village!

      The first step from all sides is to reframe the devolution issue in non-communal terms. The entire question of devolution should be addressed in terms geographic areas, urgently, if are to address it rationally.

      Dr.Rajasingham Narendran

      • 0
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        Dr. NR,

        “The entire question of devolution should be addressed in terms geographic areas, urgently, if are to address it rationally.”

        If so then the provincial boundaries need to be demarcated based on river basins as proposed by Prof. Muddumabandara of Peradeniya University. As regards devolution in terms of geographical areas, there is also the argument that there is no point in devolving political power to regions which are resource poor. At least Prof. Maddu’s proposal ensures that all river basin based regions, except the fragile hill country, to have coastal and water resources.

        Now the National Physical Plan of 2007 has also identified the central province as a fragile region and reforestation of 8,000 sqkm has been recommended. I vaguely remember late Rohana Wijeweera proposing in his manifesto for 1982 Presidential Election, similar reforestation for the region above 4,000 ft contour. It is also the opinion of some hydrologists that reforestation of fragile land in the Central and Uva provinces is a high priority.

        With kind regards

        The Professional

        • 0
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          The Professional,

          Thanks. I am aware of Prof. Madduma Bandara’s proposal and welcome it as a solution. What is beginning to unfold in the Central Province is criminal. 2500 individuals are to be allocated 02 acres each in the marginal tea plantations for cultivation. This will amount to a total of 5000 acres. This will lead to soil erosion and further destruction of the green cover. These individual, who are likely Plantation Tamils should be allocated land in the north and east and provided financial and technical assistance to cultivate the available lands there. The 5000 acres in the hill country should be deforested. I do not think there will be serious objections to plantation Tamils being settled in the north and east. However, political formations such as the CAC will object vehementally, as the move will erode their captive vote base.

          The nature of our politics is more anti-national than anyone cares or dares to admit!

          Dr.RN

          • 0
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            Correction: should read CWC instead of CAC.

            Dr.RN

            • 0
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              Another correction: Reforested instead of Deforested. ( the word program is making its own judgements! )

              Dr.RN

  • 0
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    I seek to assuage just one misapprehension of Mr.Iqbal. The thrust of my article was that in the Emerging Power Balance, India was no match for China. Therefore it is impolitic for the Tamils to continue to remain in India’s tentacles. Lessons have to be drawn from repeated betrayals. Moving away from India to friendly countries was advanced, China being one among them. That China will not switch alignment in SL is not unknown.

    As for other misapprehensions, he can correct them himself or time will.

    • 0
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      Mr Sivathasan, you appear to be an ostrich burying your head in the sand. I agree with you that India is not a friend of the Tamils today. But didn’t the Tamils contribute to that in no small measure? Was the LTTE lily white in its own dealings? The LTTE ideology continues to shape Tamil opinion even if the organization no longer exists within Sri Lanka. The Tamils have no long term allies internationally. The West is only interested in ensuring that Sri Lanka is no longer under China’s ambit. Once that geostrategic objective is achieved, the West will forget about human rights in the island. They successfully detached Myanmar from China’s orbit. The sanctions were removed soon thereafter. And not a whisper is made on Myanmar’s treatment of its Muslim minority! The same will happen in Sri Lanka. As long as Rajapakse is in power, the West will raise the Tamil issue to contain him. Once he is neutralized or weakened, the Tamil issue will be forgotten about.

      You speak of India being no match to China. Its all about alliances. Encircled, China will be contained. China lacks the clout in Sri Lanka to alter anything. China faces Japan to its East, backed by the US. The disputed Senkaku islands will remain Japanese. It faces Vietnam to its South. Vietnam defeated the much larger Chinese army in 1979. The disputed islands in the South China Sea will not be annexed by China anytime soon. China faces India, indirectly backed by the US, to its West. China is being contained – slowly but gradually even as its economy will continue to grow at a slower pace than before given the international recession. China simply lacks the global military reach and alliances that the West as a collective has. Look at the Anglo Saxon World. They have the US, Australia, Canada, New Zealand and the UK. Look at the miles of sealanes separating them each. But they act as one entity on key issues, China being one. The Tamils need to stop being over-confident and use the limited window they have to seize the moment vis a vis Western apprehensions of Rajapakse. This also means the entrenched anti-Indian hatred that you epitomize needs to be relooked at from the view of a larger picture. The West defers to India, weak as you may think the latter is, on issues such as the UNHRC Resolution and the CHOGM Meeting.

    • 0
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      I fully agree with Sivathasan that we, the Tamils should free ourselves from the tentacles of India and stop looking up to India as our ‘protector’. India itself is an artificial creation of the British, now carrying a pot of fire ( Kashmir) in it’s head! We should approach not only China but whatever country, real or potential, that will be willing to help us with equanimity.

      • 0
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        Dream on Sengodan – dream on. Tamils ain’t a hot commodity that the world is heaving for. India is all you’ve got and you alienated them in right royal fashion

        • 0
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          If by India you are referring to the Establishment that is ruling in Delhi, it is not bound to remain the same for long. Whether India itself will remain a single entity is to be seen. It is not a day dream but a vision.

          • 0
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            Sengodan, you are probably correct that the ruling UPA coalition will be jettisoned at the next elections. But India will remain united as there are many factors to ensure that – its middle class, its Dalits, its military, its transport connectivity, its national political parties (even DMK can not win elections in Tamil Nadu without a Congress or BJP alliance) etc. Its we Tamils whose existence in Sri Lanka might be at stake unless we play our cards wisely – which means no rash knee jerk steps nor wishful thinking. All countries are artificial creations.

          • 0
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            One can understand the age old prejudice against the vadakaththaan
            – an established Jaffna prejudice. Indians – and particularly the South Indians – are beginning to take note of this. But to suggest India is on the way to dis-integration is the height of folly. Even if the UPFA is defeated India will remain economically strong. There are signs already, despite 2014 being election year – FDIs are coming in larger numbers. The JetAirways-Emirates tie up alone brings close to a billion dollars. Despite all of its perceived weaknesses she remains the only stable country in the region. The latest victory of the Congress in Karnataka 2 days ago makes many think whether this wide perception of a certain Congress defeat will come by at all.

            Senguttuvan

  • 0
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    Rs.35 billion is mentioned in the context of recurrent expenditure. In another para it is clearly stated that expenditure was 100+60. Sixty is made up of 35+23.363=58.4 rounded off to 60. There is limited scope for redeployment of 35, a portion of which can go for irrigation or highways.

  • 0
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    Senguttuvan

    FDI inflow into China in 2012 —- $253.4 billion
    ” ” ” India in 2012 ____ $ 25.3 billion

    India’s FDI in 2011 ____ $ 36.5 billion

    • 0
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      The comparative low FDI into India to that of China is not only a serious worry to GOI but many experts, in and outside the Govt, are
      studying how it can be improved. They have the good sense not to compare them to China – with a free (nosy?) press, fierce opposition and so on. They are initially planning to accomplish $50 billion – a sum that is exceeded by remittances from expatriates and Indian workers abroad. Things may improve after the Elections next year
      when, whatever regime is in power, will not have the compulsion to shape their policies to suit the sensitivities of the electorate.

      I am convinced Sri Lanka still has the natural and manpower capacity to lift itself to a Per Capita initially to US$5,000 if only politicians listen more to competent administrators and professionals.

      Tku for the data.

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