In an obvious mix up in priorities, the Yahapalanaya government led by Maithripala Sirisena and Ranil Wickremesinghe continued to shower the 225 parliamentarians with bonanza after bonanza, while slapping the public with more taxes and price increase in essential items. In the latest bonanza, the Cabinet approved a proposal to provide an extra vehicle each to the Parliamentarians, which is expected to cost the government a colossal sum running to several hundred million.
The additional vehicle for which approval was given, is in addition to the vehicle they receive through the permit which they are entitled to. The proposal for an additional vehicle for each parliamentarian was submitted by the Minister of Media and Parliamentary Affairs, Gayantha Karunathilaka.
The latest move comes in the midst of another proposal to provide an additional monthly allowance of Rs.175,000 to parliamentarians, which will cost the government a further Rs. 472.8 million a year. The proposal received wide opposition from civil society organisations including the National Movement for Social Justice, Purawesi Balaya and Decent Lanka.
The back to back bonanza offers to parliamentarians come in the wake of the government facing a severe financial debacle, and as the country continued to plunge into economic chaos.
Former President Mahinda Rajapaksa claimed that in a period of just one year the Sirisena-Wickremesinghe government had obtained a staggering US $ 6361 million in loans. While Wickremesinghe has been continuously blaming Rajapaksa, saying due to the loans taken during the past decade, the current government is in debt to the tune of almost Rs. 10 trillion.
Speaking in Parliament last Wednesday, Prime Minister Ranil Wickremesinghe disclosed that within the next six weeks, his government will have to decide if the government had the capacity to absorb US $ 1 billion debt, else the future course of action that should be taken to address this issue. The debt ridden national carrier, SriLankan airlines is dragging an equally debt ridden government into a fresh crisis having no way of paying up a nearly US $ 1 billion debt.
Last week, the government approached China seeking a currency swap of US $ 1 billion, which follows a currency swap with India, as the country’s foreign exchange reserves continued to deteriorate. The Yahapalanaya government has also so far failed to attract foreign investments to the country despite initial rhetoric pledging otherwise.
This month, Sri Lanka also received repeated setbacks from international credit rating agencies, with Fitch Ratings downgrading its ratings on Sri Lanka by a notch to B+ with a negative outlook, which was followed by Standard & Poor’s revised outlook on its B+ sovereign credit rating to negative, in the midst of mounting concerns of increasing debt, weak revenue and decline in foreign reserves.
In early March, Wickremesinghe increased the Value Added Tax to 15%, and also reintroducing the Capital Gain Tax. Mid this month, the price per kilogram of wheat flour was increased by Rs. 7.20, which resulted in an increase in all flour based products including bread, which went up by Rs. 4.