Sri Lankan tax collection is at very low ebb while government essential expenses are on the rise and to balance this more revenue is needed. One of the best options for this at this time for Sri Lanka is to raise revenue through divesting state owned enterprises, said Treasury Secretary, Mahinda Siriwardane.
Government revenue has dipped from 22% to 8% against the GDP while State expenses have gone up to 19%. He said most of the government revenue has to be reinvested to keep SOE’s that are in Red and also pay public servants who are employed in most of them.
“By divesting some of these SOE’s Sri Lanka can save huge amounts of ‘money’ that are channeled towards the upkeep of SOE’s and they could be used for other infrastructure projects and provide better facilities for health education and other key areas. He also recalled that by giving fuel and providing electricity at subsidiary rates these institutions incurred losses and in turn State banks and the State had to bail them out to a certain extent. He said that if SOE reforms are not done Sri Lankans will once again have to face another major economic crisis. Governor Central Bank, Dr. Nandalal Weerasinghe said that the privatization of SOE’s should not be looked at from a wrong perspective. “Most of them are a burden to the State and the government has spent a huge amount of money to keep them up. Hence people should support this process as on the long run privatized SOE’s will give the public a far better service than what is currently being offered.
“People standing against privatization should not do so to protect the unions and their perks they enjoy. We must all think of the country first.”
State Minister of Public Management and Accounting, Lasantha Alagiyawanna said that once SOE’s are divested a check and balance system should be in place to monitor then and ensure best prices are provided for customers.
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