August 16, Colombo (LNW):India is on track to potentially transform into a $55 trillion economy by 2047, contingent upon the aggressive implementation of growth-oriented policies by both state and central governments. This bold vision was outlined by Krishnamurthy V. Subramanian, Executive Director of the International Monetary Fund (IMF), during the launch of his book India @100 at the Indian School of Business (ISB).

Subramanian, who previously served as India’s Chief Economic Advisor, emphasized that while this target may seem ambitious, it is achievable if India maintains its current growth trajectory. Presently, the Indian economy is valued at approximately $3.25 trillion. Subramanian presented a roadmap to reach the $55 trillion goal, emphasizing the power of compounding growth.

Utilizing the “rule of 72,” which estimates the time required for an investment to double based on its annual growth rate, Subramanian explained how India’s GDP could double every six years with an 8 percent growth rate, a 5 percent inflation rate, and a 1 percent annual depreciation of the rupee against the dollar. This compounding effect could propel the Indian economy to nearly $52 trillion by 2047.

Subramanian drew parallels to Japan’s economic rise, noting Japan’s expansion from $215 billion in 1970 to $5.1 trillion in 1995—a 25-fold increase over 25 years. He argued that such rapid economic growth is feasible under the right conditions.

Despite India’s current private credit-to-GDP ratio of 58 percent in 2020, which lags behind advanced economies with ratios exceeding 200 percent, Subramanian highlighted the country’s progress in financial inclusion through initiatives like the ‘Pradhan Mantri Jan-Dhan Yojana.’ However, he stressed that achieving the $55 trillion economic vision requires more than just high growth rates.

Effective utilization of government borrowings, investments in physical infrastructure, enhancement of human capital, improvements in healthcare, and building digital capital are all critical components of sustained economic growth. Subramanian urged that government borrowings should be used to create long-term assets rather than funding subsidies or revenue expenditures.

As India approaches this potential new economic era, the journey towards becoming a $55 trillion economy will require strategic planning, robust policy implementation, and a collective effort from all sectors of society.

August 16, Colombo (LNW):Following persistent appeals by the Ministry of Foreign Affairs, 20 Sri Lankans who were victims of human trafficking and stranded in Myanmar have been rescued and safely arrived in Mae Sot, Thailand, on Wednesday (14th). Sri Lanka’s Ambassador to Thailand, Wijayanthi Edirisinghe, visited Mae Sot to meet the rescued individuals and inquire about their welfare. The Sri Lankan Missions in Yangon and Bangkok have been working closely to secure their safe release and ensure their well-being.

All 20 rescued Sri Lankans are reported to be in good health. Thai authorities are providing Consular assistance, and the Sri Lankan Embassy in Bangkok is coordinating with them to facilitate the repatriation process.

The Ministry of Foreign Affairs is also actively working to rescue the remaining 34 Sri Lankans currently stranded in the Myawaddy area of Myanmar, with the cooperation of the relevant governments.

These individuals had traveled to Myanmar seeking foreign employment without following the proper procedures, using tourist visas, and were subsequently lured into cybercriminal operations, becoming victims of human trafficking.

The Ministry of Foreign Affairs has issued a warning, urging the public to be cautious and to adhere to proper procedures when seeking employment abroad to avoid falling prey to human trafficking.

August 16, Colombo (LNW):Transport, Highways, and Mass Media Minister Dr. Bandula Gunawardhana has emphasized the importance of revealing the work accomplished by seven former Cabinet Ministers who are running in this year’s Presidential Election. Speaking at a joint forum of former Local Government representatives from various parties, including Sri Lanka Podujana Peramuna, United National Party, Sri Lanka Freedom Party, and Mahajana Eksath Peramuna in Homagama, Dr. Gunawardhana highlighted the need for voters to be informed about the candidates’ past achievements.

Minister Gunawardhana shared his own contributions as a Cabinet Minister under multiple governments. He mentioned the establishment of special Economic Centres across the country, aimed at creating markets for agricultural products, and the revival of the cooperative business model through the implementation of Coop City and Mini-Coop City. He also noted the creation of a nationwide network of Lak Sathosa branches.

As the Minister of Education, Dr. Gunawardhana introduced technology streams into the national curriculum, established Technology Faculties in universities, and oversaw the construction of Mahindodaya technology labs and faculties across the country.

The Minister asserted that the past performance of these former Cabinet Ministers is crucial for evaluating their ability to fulfill future responsibilities. He called for the public to be informed of their achievements, which he believes will help voters make an informed decision in the upcoming Presidential Election.

August 16, Colombo (LNW):India’s 78th Independence Day was celebrated with great fervor across Sri Lanka on August 15, 2024. The main event in Colombo took place at ‘India House,’ the official residence of the High Commissioner of India, Santosh Jha. The High Commissioner hoisted India’s National Flag and inspected the Guard of Honour. He also read excerpts from the address by the President of India to the nation on the eve of Independence Day.

The celebration was enhanced by various cultural events, including a performance by the Sri Lanka Navy Band, which played tunes embodying valour and patriotism. A visiting troupe from the Indian Council for Cultural Relations (ICCR), led by Ranjith Gogoi, captivated the audience with a soulful Bihu Dance performance. In addition, the High Commissioner and officers of the High Commission of India paid homage at the Indian Peace Keeping Force (IPKF) Memorial, honoring the soldiers who sacrificed their lives for peace and unity in Sri Lanka.

Special events were also organized by the Assistant High Commission in Kandy, the Consulate General in Jaffna, and the Consulate General in Hambantota to mark the occasion.

Later in the day, the Bharat Sri Lanka Maitri Utsav 2024 was inaugurated at the iconic Independence Square Park in Colombo. This four-day festival, running from August 15 to 18, will feature a traditional handicrafts exhibition showcasing artisans from India and Sri Lanka, cultural performances, and a food festival. The Utsav will remain open to the public until 10 pm on August 18.

August 16, Colombo (LNW):Prevailing showery condition over the South Western parts of the Island is expected to be temporarily enhanced today and tomorrow.

Showers or thundershowers will occur at times in Western, Sabaragamuwa and North-western provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts. Heavy showers above 100 mm are likely at some places in Western, Sabaragamuwa provinces and in Galle and Matara districts.

Showers or thundershowers will occur at several places in Eastern and Uva provinces during the evening or night.

General public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

By: Staff Writer

August 15, Colombo (LNW): The Sri Lankan government has suggested to the International Monetary Fund (IMF) that income tax relief be provided by adjusting tax brackets, according to President Ranil Wickremesinghe’s office. 

This comes as tax burden discussions gain traction in the ongoing presidential election campaign.

President Wickremesinghe indicated plans to offer relief on personal income tax soon, with two proposals under consideration—one from the Treasury and a counterproposal from the IMF. These plans aim to benefit middle-income groups, including academics.

As part of economic reforms agreed upon with the IMF, Wickremesinghe’s administration increased the top personal income tax rate from 24% to 36% and lowered the tax brackets to 500,000 rupees after the country faced a severe economic crisis in 2022. 

While this move boosted government tax revenue, it also drew criticism from millions of public and private sector workers due to the higher tax rates and reduced brackets.

In light of stronger tax revenue performance this year, the government has proposed to the IMF an adjustment in the Personal Income Tax brackets from 500,000 to 720,000 rupees, aiming to ease the burden on mid-level taxpayers impacted by recent tax changes. 

The IMF has suggested modifications to this proposal, offering more relief to lower-income groups, similar relief for mid-level earners, and slightly less for higher-income earners, while keeping the core proposal intact.

Opponents in the presidential race have suggested renegotiating IMF agreements and lowering taxes, although they have yet to present a detailed economic plan. Additionally, the government has increased the value-added tax (VAT) from 8% to 18% over the past two years.

Wickremesinghe’s strict economic reforms have contributed to Sri Lanka’s economic recovery, though they have resulted in reduced disposable income for many citizens who now face direct tax deductions from their salaries.

The President outlined a series of economic targets, including achieving a primary budget surplus of 2.3% by 2025-2032, reducing the public debt-to-GDP ratio to 95% by 2032, and maintaining inflation below 5%. He emphasized that these terms are non-negotiable and necessary for the country’s continued economic recovery.