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Second budget of ‘yahapalana’ regime too is an empty shell

Oct 23, 2016 1:03:26 PM - lankatruth.com

The appropriation bill presented by the ‘yahapalana’ government for 2017 is nothing but an empty shell says the National Organizer of the JVP Bimal Rathnayaka. He said this addressing a media conference held at the head office of the JVP at Pelawatta today (23rd) to draw the attention of the people to the response of the JVP to the Appropriation Bill for 2017 presented to Parliament on the 20th.

Mr. Rathnayaka said, “The budget presented for 2016 was based on several fundamental items related to the economy. It was based on 5 economic prospects. They are one million jobs, raising the economy of the people, developing rural economy, creating a broad middle class and giving ownership to lands presently occupied by rural and estate communities. As a tax policy it was stated that indirect taxes levied from the masses would be reduced to 40% and direct taxes would be increased to 60%. The promise was to levy higher taxes from the affluent and to tax less from the low income earners.

There have been years recently when a complete budget was not presented. An example is 2010. In a post war environment Rajapaksa regime allocated monies using an interim budget. However, a budget was presented in 2016 but such a budget was never presented in the history of this country. The presented budget was officially amended thrice. However, nothing was implemented relevant to the budget. The statistics regarding the one million jobs cannot be found anywhere. The Chief Accountants in Ministries are not aware of economic matters of this year. Definite statistics regarding job generation could be obtained from the new members who join the EPF. It is proved that 100,000 jobs have not been given this year.  Raising the economy of the people, developing rural economy, creating a broad middle class and giving ownership to lands and other aspirations of the masses have not been fulfilled. Giving lands to the estate community has been limited to presenting of 300 deeds only.

It is stated that the economic growth in the first 6 months of this year is 3.9%. What is notable is the economic growth during the second quarter has come down to 2.6%. When the government came to power it was said that the economic growth would be raised to 6% through a broad economic plan. However, the lowest economic growth for the recent history was observed in the second quarter decreasing the economic growth of the service sector to 4.9%. The economic growth of all sectors has come down. Also, the prices of essential consumer goods are going up rapidly. Raw rice that was at Rs. 68 a kilo has increased to Rs.75. When this government came to power it criticized debt taking of Rajapaksa regime. However, during the first 6 months of this government the debt burden has become heavier. During the first 6 months the government has taken loans to the tune of Rs. 559,000 million. This ‘yahapalana’ government that criticized Rajapaksa regime has taken Rs.127,000 million internationally and Rs.432,000 million locally. The promises of job generation, economic growth and reducing COL given to the masses have not been fulfilled.

The biggest lie in the previous budget in 2016 was about taxes. The Minister of Finance said the taxes heaped on the general public by Rajapaksa regime would be brought down from 80% to 40% and the direct taxes would be increased from 20% to 60% to levy higher taxes from higher income earners. What has happened today is that the indirect taxes heaped on the ordinary people have been increased from 80% to 85% and the direct tax levied for the rich has been brought down from 20% to 15%. This situation is due to the reduction by the Rajapaksa regime the direct tax enacted in 2013 from profits of companies from 35% to 28%.  This was reduced to 17% from the last budget. As such, this government reduced the tax for the rich by 11% and increased the tax levied from the people.

Let’s have some idea regarding the Appropriation Bill related to the budget 2017 against this background. Despite explaining according to the Appropriation Bill, we all know there would be changes from time to time.  Throughout the past monies allocated from the Appropriation Bill were changed during the year. It is merely a list of numbers presented in Parliament and not anything to do with the real budget. Even under such circumstances we have a basic explanation. Compared to last year the allocation for the President has been increased by Rs. 3060 million. Last year allocation for the President was Rs. 2391 million. This year it has been increased to Rs. 5451 million. It’s roughly an increase of 350%. Last year the Prime Minister’s allocation was Rs.486 million. This year it has been increased to Rs. 1254 million. The allocation for the Ministry of National Policies and Economic Affairs that come under the Prime Minister has been increased by Rs. 350 million.

The biggest reduction in the appropriation document has been for sectors related to local economy. This reduction is in a situation where a large amount of money has been allocated for defence despite the country is not involved in a war. Despite allocation for defense has been reduced by Rs. 18,000 million, the largest amount – Rs. 284,000 million has been allocated for defense while monies needed for essential sectors that affect people have been slashed. The allocation for the Ministry of Health for this year is Rs. 174,000 million. This has been brought down to Rs. 160,000 million slashing Rs.13,106 million. It is a reduction of nearly 10%.

The allocation for the Ministry of Education is significant. Last year the Minister of Finance carrying out a numbers game added the value of the school buildings constructed from Kannangara era as expenditure for this year. Due to the opposition the move received, Rs.121 billion was reduced and amended it as Rs.46 billion for this year. This year only Rs.76 billion has been allocated. If another Rs.75 billion is not added from the budget the allocation for Education would be a massive reduction.

This government has a mandate for allocating money for education. It was stated they would move towards allocating 6% of the GDP for education. Despite the government making statements that 6% would be allocated, in the budget it has been reduced to 2.6% of GDP. Also, despite Rs. 163 billion has been allocated for the Ministry of Highways and Higher Education, once the money spent for highways is deducted the money left for higher education would be a small amount. The allocation for the UGC, which is directly connected to universities, has been reduced from Rs. 44,923 million to Rs.38,854 million. The allocation for the Ministry of Women and Children’s Affairs for this year was Rs. 9765 million. This has been reduced to Rs.2694 million for 2017. The reduction is about Rs.7,000 million. We suspect that the allowance given to pregnant mothers and for welfare could be the amount that has been slashed.  Despite those who are employed abroad are called heroes, the allocation for the ministry has been reduced from Rs. 1036 to Rs. 694 million.

A large amount has been slashed in connection with rural agricultural economy. The slashing of allocation for the Ministry of Agriculture is very serious. The highest employment is in the agriculture sector. The reduction in allocation for the Ministry of Agricore for 2017 is Rs. 32,807 million. The allocation for this year was Rs. 54,200 million. It has been reduced to Rs. 21,393 million.  The livelihood of more than 10 million is connected with the Ministry of Agriculture.  As such, this reduction would have serious consequences. Also, allocations for fisheries, small industries, environment etc. have been slashed. Despite there are various environmental issues such as man – elephant conflict, Rs. 11,662 million has been slashed from the Ministry of Environment that is under the President.

The allocations for ministries that affect the people have been slashed changing the name of the ‘open economy’ to ‘Social Market Economy.’ In plain language the government implements its political agenda by pressurizing the masses with severe economic burden. The situation is serious as the government is ignoring the mandate it received when it came to power. This is revealed in the Appropriation Bill presented.  How the government that came to power promising to do away with frauds and corruption and raising the economy destroyed by Rajapaksa regime is acting is clear to the people. The statement made by the President with the intension of protecting fraudsters and the corrupt has terminated the discussion to stop frauds and corruption. Sleeping with thieves has become the sole political agenda of the Ranil – Maithri administration. President’s outburst has activated the first innings and playing the second innings by moving within COPE to protect fraudsters exposes the political agenda of the ‘yahapalana’ government. The Appropriation Bill reveals that the government has no vision or plan to develop the economy of the country. We call upon the masses in this country and the media to reveal that the government has failed to fulfill the mandate it received. As the JVP, we emphasize that there is no other alternative other than changing this administration and taking the country on the path of a new political and economic transformation. We have already commenced rallying people for such a noble task. We invite all to rally around this force.”

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