If the 2003 Fiscal Responsibility Act was continued SL would not have faced bankruptcy – Minister Dr. Bandula
Transport, Highways and Mass Media Minister Dr. Bandula Gunawardhana said that if the Fiscal Management (Responsibility) Act which was introduced by former Prime Minister Ranil Wickremesinghe in 2003 was allowed to continue, Sri Lanka would not have faced an economic crisis.
He said that during this time tough reforms were also introduced and the government had even halted any appointment to the public sector and new laws were drafted to have some physical control in the government. “However when Chandrika Bandaranaike removed former Prime Minister Wickremesinghe this upward economic trend was stopped and the process was reversed.”
Minister Dr. Gunawardhana said that even after increasing the VAT to 18 percent and implementing other revenue-earning mechanisms, the total revenue generation of the government is around Rs. 3.2 trillion.
The main contributors for this revenue are: tax revenue of Rs. 1,555 billion, Customs duties – Rs. 923 billion, Excise duties – Rs. 196 billion, Motor Traffic fees and levies – Rs. 20 billion and the balance from other sources.
“In contrast, the total expenditure of the government is around Rs. 4.394 trillion with the expenses for public sector wages and other handouts like ‘Aswesuma’ being around Rs. 2,130 billion, hence creating a huge economic imbalance of over Rs. 1 trillion.
He also said that the country needs around US$ 14 billion to service the debts of private creditors.
The Minister, who has been in Parliament since 1989, said that the country was making some economic progress when Ranil Wickremesinghe was the Prime Minister and the country sought IMF assistance. During this time, tough reforms were introduced and the government even halted any appointment to the public sector and new laws were drafted to have some physical control in the government. “However when Chandrika Bandaranaike Kumaratunga removed former Prime Minister Wickremesinghe, this upward economic trend was stopped and the process was reversed.
Minister Dr. Gunawardhana recalled that during the term of the previous government when President Gotabaya Rajapaksa wanted to go to IMF, several senior Ministers vehemently opposed the country going to the IMF and some even wanted to walk out of the Cabinet meetings protesting against it.
“But today, whatever the people say, the IMF reform agenda has helped the country to turn around and if this reform process is tampered with, the country will again face a far greater economic crisis.”
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