Public sector Salaries expenditure down while Pension payments up 

At a time when Sri Lanka is looking to restructure its state-owned enterprises (SOE), which continue to be a massive burden to the economy, the government needs to step up efforts to tackle the bloated public sector, for which active steps are yet to be taken.

The latest update by Publicfinance.lk showed that according to the 2023 budget estimates, 15 percent of the total recurrent expenditure of the government will be spent on salaries of government employees.

Of the total state salaries, the defense sector claims 48 percent. The tri-forces take up 32 percent of the total payroll expenditure and 16 percent goes for other defense services.

According to World Bank (WB) data, the size of Sri Lanka’s armed forces was at its highest between 2017 and 2019 with 317,000 personnel. This was several fold more than the number of personnel recruited during the civil war which ended in 2009.

In January, the Ministry of Defense announced it will slash its army to 135,000 personnel (by a third), and to 100,000 by 2030.

The expenditure on salaries and wages of public servants including Provincial Councils declined by 4.0 percent to Rs. 303.3 billionin the first four months of 2023, compared to Rs. 316.1 billion in the same period of 2022, finance ministry data shows. 

This drop was due to the increased number of retirees at the end of 2022, the suspension of recruitment to public sector together with the revision of the compulsory retirement age to 60 years. 

However, the expenditure on pensions increased by 6.3 percent to Rs. 105.9 billion in the first four months of 2023, compared to Rs. 99.7 billion in the same period of 2022.

The Government incurred Rs. 264.39 billion on household subsidies including Samurdhi payments, elder’s allowance, assistance to differently-abled soldiers, food packages for pregnant mothers, and fertilizer subsidy and school uniforms and text books in the first four months of 2023.

Expenditure on Samurdhi cash grant provided to low-income families for the first four month of year 2023 has increased to Rs. 55,593 million from Rs. 20,679 million in correspondence period of 2022 due to the Government decision to provide allowances.

The Sri Lankan Rupee experienced a depreciation against the US Dollar at commercial banks in Sri Lanka today (July 20) compared to the previous day.

At Peoples Bank, the buying and selling rates of the US Dollar rose from Rs. 314.34 to Rs. 315.80 and from Rs. 329.80 to Rs. 331.34, respectively.

Commercial Bank reported an increase in the buying rate of the US Dollar from Rs. 315.22 to Rs. 317.20, and the selling rate also rose from Rs. 327.50 to Rs. 328.50.

At Sampath Bank, the buying and selling rates of the US Dollar increased from Rs. 315 to Rs. 317 and from Rs. 328 to Rs. 330, respectively.

On Friday (July 20), the revered business tycoon Merrill J. Fernando, who founded and formerly served as the CEO of the esteemed Sri Lankan exporter ‘Dilmah Tea,’ passed away at the age of 93.

A murder suspect, sought in connection with a homicide in Homagama, met his demise in a dramatic shootout with the Police Special Task Force (STF).

The confrontation occurred in Minuwangoda during the early hours of this morning (July 20), as reported by the police.

1. Parliament passes the Anti-Corruption Bill without a division, but with amendments.
2. Supreme Court dismisses a Fundamental Rights petition, filed against the Minister of Public Security, members of the Police Commission and Senior Police Officers, which alleged that they did not take necessary action pertaining to the incidents that took place on May 9, 2022.
3. IMF Executive Director for Sri Lanka Professor K Subramanian says Sri Lanka’s forthcoming review of the USD 3 bn IMF package “should go through” given the falling inflation, appreciation of the rupee and build-up of foreign reserves: analysts however point out that Sri Lanka’s economic growth has been hugely negative in all 4 quarters since seeking IMF help, the LKR has depreciated over 10% in the last one & a half months, Cost of living has soared since April 2022, and reserves have been buttressed mainly by highly expensive borrowed “hot-money” and not genuine forex inflows.
4. Central Bank’s T-Bill auction yesterday fails miserably: out of the total of Rs.160 bn offered, only Rs.64 bn accepted, even with higher interest: the huge shortfall of Rs 96 bn likely to warrant further “money-printing” by the CB: CB had to resort to Rs.105 bn in “money-printing” last week to keep interest rates in check: serious crisis looms.
5. Attorney General files a preliminary objection before the Supreme Court, seeking the dismissal of the FR petitions filed by the former Chairman of PUCSL Janaka Ratnayake & others, challenging the electricity tariff hike which took place in February 2023.
6. European Commission to grant a 4-year extension to the current GSP+ scheme until December 31, 2027 so that countries like SL don’t lose preferential access in the interim, as negotiations for new GSP+ arrangement continue: as a result, SL will enjoy the current access to the EU market with the same obligations.
7. Sri Lanka’s Passport ranks 95th in the Henley Passport Index along with Libya: 41 countries grant visa-free travel or visa-on-arrival to holders of Sri Lankan passports: Singapore replaces Japan as the most powerful passport as it allows visa-free access to 192 global destinations.
8. World Bank Country Director for the Maldives, Nepal and Sri Lanka Faris Hadad-zervos says the Govt’s decision to go for a Domesric Debt Re-structuring and Parliament’s approval of that decision were welcome steps in Sri Lanka’s path towards debt sustainability.
9. President Ranil Wickremasinghe finds fault with Parliament for the developing financial crisis: asserts that one of the major reasons for the crisis was the failure on the part of the Parliament to ensure financial discipline: also blames Parliament for not appropriately exercising its power.
10. Cricket Men’s Asia Cup (50 overs) scheduled to be held from 30 August to 17 September in Lahore & Multan in Pakistan and Pallekele & Colombo in Sri Lanka: Pakistan vs India match to be played on 2 September at Pallekele: Final at R. Premadasa Stadium, Colombo on 17 September.

Today (20) marks the historic election of Ranil Wickremesinghe as the eighth Executive President of the country. Taking over the reins during a time of turmoil with long gas and fuel queues, President Wickremesinghe has successfully transformed the situation, normalizing the country.

In an unusual move, President Wickremesinghe has instructed officers not to organize any event to celebrate the completion of his first year in office. Despite numerous requests from various parties, he firmly objected to using public or private funds for such ceremonies.

Ranil Wickremesinghe’s journey to the presidency began with an official visit to India on the day of his election as the successor President. Elected through the Election of the President (Special Provisions) Act No. 2 of 1981, he secured the position by a majority vote in the Parliament, receiving 134 votes while his opponents, Dallas Alahapperuma and Anura Kumara Dissanayake, obtained 82 and three votes, respectively.

Sworn in on July 21 in the Parliament, Wickremesinghe had previously been appointed to the Ninth Parliament as a National List Member of the United National Party on June 23, 2021. Following the resignation of the then Prime Minister, Mahinda Rajapaksa, on May 9, 2022, Wickremesinghe stepped up to accept the Prime Minister position. At the time, the post was vacant, and neither the Opposition Leader, Sajith Premadasa, nor any other individual had come forward to assume the role.

Promising to address the multiple crises faced by the country, Wickremesinghe took on the challenging role of Prime Minister on May 12. Later, on July 14 of the same year (2022), President Gotabaya Rajapaksa resigned from office, and Prime Minister Ranil Wickremesinghe was sworn in as Acting President on July 15, following constitutional provisions.

In recognition of his efforts to overcome the economic crisis, international organizations and states, including the International Monetary Fund, have extended support to President Ranil Wickremesinghe’s work in restoring the country’s stability.

The Anti-Corruption Bill faced a tumultuous journey through Parliament, culminating in its passage on Wednesday (19 July). The Bill, initially presented before the House on 06 July, encountered heated debates and was finally approved without a vote.

During the Committee Stage today, the Bill was presented with several amendments proposed by both the Minister and the opposition. The Second Reading debate, held on 21st June and 6th July, further added to the contention surrounding the proposed legislation.

Transparency International Sri Lanka (TISL) and other concerned parties voiced their objections to the Bill, challenging 37 clauses, including clauses 28(3), 161, and 119, citing concerns about their constitutionality. Among the issues raised were potential infringements on whistleblowing, right to information, freedom of expression, and the principles of transparency and accountability.

The Women Parliamentarians’ Caucus (WPC) also submitted their own proposals for amendments to the Bill. Additionally, the Supreme Court ruled that certain clauses of the Bill were inconsistent with the Constitution and required adjustments before implementation.

Speaker Mahinda Yapa Abeywardena clarified that the identified inconsistencies could be resolved by incorporating the amendments suggested by the Supreme Court. In response, the Additional Solicitor General assured the court that adjustments to clauses 8(3), 136, 141, 142, and 156 would be made to address the concerns raised by the petitioners.

The determined efforts to iron out the issues led to the printing of the Supreme Court’s decision in the Hansard report of the parliamentary proceedings on 06 June. With the amendments now incorporated, the Anti-Corruption Bill marks a significant step in the fight against corruption in the country.

Several spells of showers will occur in Western, Sabaragamuwa and North-Western provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts.

Mainly fair weather will prevail elsewhere over the Island.

Strong winds about (40-50) kmph can be expected at times in western slopes of the central hills, Northern, North-Central and North-Western provinces, and in Monaragala, Hambantota and Trincomalee districts.

In a passionate plea, SJB MP Ajith Mannapperuma called on State Transport Minister Lasantha Alagiyawanna in Parliament to reconsider the suspension of driving licence facilitation for certain categories of differently-abled individuals. The State Minister had recently announced that the Motor Transport Department’s circular suspended the issuance of driver’s licences to differently-abled persons.

Expressing his concern, the MP emphasized that in other countries, disabled people are granted driver’s licences without being categorized as special groups. He urged Sri Lanka to adopt this inclusive approach.

Countries like Singapore and Australia already extend driving privileges to disabled individuals, a practice not yet adopted in Sri Lanka. MP Mannapperuma argued that it is unjust to halt this process and neglect the needs of differently-abled citizens. Instead, he asserted that the country should embrace an inclusive policy that supports the mobility and independence of all individuals, regardless of their abilities.