The masses may have to brace themselves for other future price hikes vis-à-vis electricity and petroleum fuel prices, with the Government giving a commitment to the I.M.F. that the loss making Ceylon Electricity Board (C.E.B.) and Ceylon Petroleum Corporation (C.P.C.) would break even by next year.
Institute of Policy Studies Executive Director Dr. Saman Kelegama speaking on the Government’s Mahinda Chinthana policy document on Wednesday said that the Government has agreed to an I.M.F. conditionality that these two institutions would break even by next year.
He however didn’t say how this could take place.
C.E.B made a Rs. 7.4 billion loss last year while the loss made by the C.P.C. was Rs. 12.3 billion.
C.E.B. Chairman Vidya Amarapala recently told The Sunday Leader that the C.E.B. is heading for a Rs. 34 billion loss this year unless radical reforms were undertaken. Among those were re-negotiating power purchase agreements. He however ruled out further tariff hikes on the basis that the island’s electricity prices were already very high.
Kelegama further said that there were no revenue proposals in budget 2010 which was presented to parliament on Tuesday. Those will come in Budget 2011 which will be presented in parliament in November, after the Tax Commission submits their proposals to the President next month, he said.
He further said that Government revenue needed to be increased to a near 20% of g.d.p. from the current 14.6% figure. Only 8% of labour pay taxes, he said.
Kelegama added that last year the cost of interest payments, wages and salaries and subsidies and transfers were equivalent to 15.9% of g.d.p.
“There is an attempt to bring down public debt from the current 87% of g.d.p. to 80% by the year end and to 70% by 2012,” he said.