Over Rs 1.5 Tn to upkeep 400 SOEs in 2020 – Minister Semasinghe
The government has spent around Rs. 1.5 trillion to upkeep State owned enterprises, said acting Minister of Finance Shehan Semasinghe. He said that this is for 400 SOEs in 2020.
He said this at the Organisation of Professional Associations of Sri Lanka (OPA) organised ‘Meet the Minister Program’ on Monday.
Semasinghe said that this burden cannot be shouldered by the government year after year especially when the country is recovering from an economic crisis.
“This is why the government decided to divest some of the SOEs mainly to stop the drain of finances from the government coffers to upkeep these ailing SOEs.”
He said that one question that is asked regularly is why the government wants to divest profit making entities. “This is to increase efficiency on them and also to strengthen foreign reserves from the money they received from divesting the profit making SOEs. He also said that President Ranil Wickremesinghe and the government are adamant that the government should not sell all businesses but give them out to the private sector to run.
“We see more efficiency when the private sector gets involved in business.”
The minister also said that there was no hard decision taken on local debt restructuring. “But when it is done it will be done very carefully and scientifically as the government does not want to destabilize the local banking system. If it’s destabilized, Sri Lanka’s economy will once again go back to a huge economic crisis that happened a year ago.”
He also said the stock market too is settling down and taking a wrong move when it comes to local debt restructuring will upset this segment as well. He said he expects a further decline in inflation over the next two-month period as a result of the removal of majority of import restrictions and recent appreciation of the rupee. He however said that import restrictions of vehicle imports would take a longer time to be relaxed.
“We need more time for the economy to recovery.” Inflation is projected to fall to single digit by the end of this quarter and interest rate too would come down further.