Tuesday, December 5, 2023

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Former CB Governor Dr Indrajit clarifies elections and fiscal discipline

By: Staff Writer

Colombo (LNW): Former Central Bank Governor Dr. Indrajit Coomaraswamy has set the record straight over remarks concerning elections and the need to uphold fiscal discipline.

“Certain remarks which he made during a recent webinar organised by Capital Alliance have been the subject of misinterpretation in press articles which are currently doing the rounds.  The gist of this is that he advocated the postponement of elections in Sri Lanka,” Dr. Coomaraswamy said.

Issuing a clarification he said that during some of the previous 16 IMF programs, progress was made in stabilising the economy, only for the approach of elections to result in the reversal of gains through indisciplined fiscal priming for narrow political gain.

“Significant progress has been made in stabilising the economy over the past 12 to 18 months.

In this context, he said that we should not allow elections to distract us, by which I meant that in the lead-up to any election, fiscal discipline should not be lost – as has happened time and again in the past, under multiple governments – and the long term macroeconomic program should be maintained.

“He noted that repetition of such fiscal indiscipline on this occasion would have much worse consequences than ever before, as the recent multiple crises have significantly eroded the resilience of both the economy and a large proportion of the population.

He said that he did not advocate the postponing of elections. Let me make it clear that I would under no circumstances advocate that the Constitution should be violated.  

“To summarise, what he said was: do not repeat the same mistake of having fiscal indiscipline as the elections approach.  The consequences this time will be much worse than anything we have known so far.  I said nothing about the timing of the elections.”

Meanwhile  it has been revealed that postponed local polls incurred Rs1 billion cost for state coffers  

The government has spent a massive sum of public money amounting to Rs1 billion for prelimineray activities of the postponed local government elections scheduled to be held on April 25 2023 finance ministry records showed.

The cost for the Election Commission to conduct the elections estimated at just over Rs. 9 billion and the printing cost alone was Rs.1.827 billion out of which a sum of Rs.1 billion has already been spent.

Executive director of PAFFREL Rohana Hettiarchchi said that the local government elections had been postponed indefinitely and the government is planning to cancel the nominations given to elections.  

A high Official of the Elections Commission stated that the deposits could be refunded only in the event the nominations submitted for the upcoming election are cancelled.

He further noted that in order for the nominations to be cancelled, the government is required to table a Bill in this regard before the Parliament, else, nominations will be cancelled only by way of a gazette notification.

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