By: Staff Writer

October 14, Colombo (LNW): The United States Agency for International Development (USAID) has expressed its readiness to assist Sri Lanka in any necessary way, highlighting a mutual commitment to advancing development and collaboration.

Sri Lankan President Anura Kumara Dissanayake recently held a virtual meeting with USAID Administrator Samantha Power to discuss future cooperation, as reported by the President’s Media Division.

This meeting marked the first interaction between President Dissanayake and Administrator Power following the presidential elections on September 21.

During the discussion, both leaders exchanged views on topics of shared interest and explored opportunities for enhanced cooperation. Power reiterated USAID’s support for the Sri Lankan government’s efforts to align with the President’s policy framework, which emphasizes strong anti-corruption measures, President’s Media Division disclosed.

The USAID has consistently provided financial aid to Sri Lanka, especially following the country’s economic crisis and debt default in 2022. Recently, the U.S. Embassy announced an additional $24.5 million (Rs 7.2 billion) commitment to support Sri Lanka’s development goals.

 The additional funding was announced during a visit to Sri Lanka by the U.S. Agency for International Development’s (USAID) Assistant Administrator of the Bureau for Asia Michael Schiffer at an event at the Ministry of Finance in August this year.

The funds, committed through a Development Objective Grant Agreement between USAID and the government of Sri Lanka, will strengthen Sri Lanka’s market-driven growth, foster environmental sustainability and resilience, and promote good governance practices.

As a result of USAID partnerships across government, non-governmental organizations, and civil society, the funds support collaborative efforts that are making a positive difference in the lives of Sri Lankans. 

U.S. Ambassador to Sri Lanka, Julie Chung, emphasized America’s long-standing investment in the nation’s economic progress and governance, stating that this funding strengthens the partnership with Sri Lanka to build a foundation for lasting stability and prosperity.

Since 1956, the U.S. has provided more than $2 billion in aid to Sri Lanka, contributing to various sectors including agriculture, education, health, infrastructure, and women’s entrepreneurship.

This ongoing support from USAID has played a significant role in modernizing Sri Lanka’s infrastructure, supporting nutrition and health programs, developing sustainable energy solutions, and empowering women entrepreneurs to contribute to economic growth.

This additional funding demonstrates our steadfast commitment to working with local partners in Sri Lanka. Together, we are building a foundation for lasting stability and prosperity for communities across the country.”

Over the last seven decades, U.S. support has helped modernize Sri Lanka’s diesel coaches, supported its thriposha supplemental nutrition program, supportedthe development of electric vehicle charging stations and empowered women entrepreneurs to drive economic growth.

By: Staff Writer

October 14, Colombo (LNW): The Institute of Policy Studies of Sri Lanka (IPS) recently released its annual flagship report, “Sri Lanka: State of the Economy 2024,” under the theme “Economic Scars of Multiple Crises: From Data to Policy.”

 The report offers an in-depth look at Sri Lanka’s economic recovery, outlining key challenges and necessary policy measures for the country’s development.

Limited Policy Options amid Fragile Recovery

Dr. Dushni Weerakoon, IPS’ Executive Director, discussed the constraints faced by Sri Lanka’s macroeconomic environment. Emphasizing the limited policy tools available for boosting economic recovery, she highlighted the need for marginal adjustments in tax and spending policies to address the distributional impact on different income groups.

 According to Dr. Weerakoon, the data-driven insights in the report aim to guide policy discussions to navigate Sri Lanka’s economic path forward.

Addressing Taxation Inequities

One of the report’s significant findings focuses on the impact of recent tax reforms. IPS Research Economist Priyanka Jayawardena pointed out that the poorest income groups are disproportionately affected by increases in VAT rates, spending up to 10% of their income on VAT compared to just 6% for higher-income earners.

In contrast, direct taxes like Pay-As-You-Earn (PAYE) and Personal Income Tax (PIT) were found to be more progressive, with the wealthiest 10% contributing 95% of these taxes. However, tax evasion remains a major issue, as less than one-third of the estimated PIT payable was actually collected in 2023.

Enhancing Welfare Programs through Better Targeting

The report also delves into the effectiveness of the Aswesuma welfare program in targeting the most vulnerable populations. Dr. Pulasthi Amarasinghe from IPS highlighted that Aswesuma uses a more multidimensional approach than its predecessor, the Samurdhi program.

 Despite this improvement, nearly 40% of food-insecure households were found to be ineligible under the current Aswesuma criteria. Dr. Amarasinghe recommended incorporating nutrition and disaster exposure as additional factors for eligibility to ensure better support for food-insecure families.

Youth Employment and Skill Development

Challenges in youth employment and education were another focal point of the report. Dr. Nisha Arunatilake, IPS Director of Research, noted that while there has been an increase in vocational training since 2018, a significant issue remains with 65% of youth aged 20-24 not engaged in any form of education. This lack of skill development poses a threat to Sri Lanka’s labour market productivity, especially in light of technological advancements and evolving job requirements.

Conclusion

The IPS report underscores the complex socio-economic issues facing Sri Lanka and highlights the need for strategic policy interventions to support equitable growth. By focusing on progressive taxation, targeted welfare, and youth skill development, Sri Lanka can navigate its fragile economic recovery more effectively.

October 14, Colombo (LNW): The Colombo Magistrate Court rejected an appeal filed by Director of W.M. Mendis Distilleries Arjun Aloysius and Anthony Randev Dinendra John demanding the nullification of the six-month prison sentence imposed on them by the Court today (14).

The Colombo Magistrate Court handed down a six-month prison sentence to Aloysius, along with two other executives, for their failure to settle Rs. 3.5 billion in unpaid Value Added Tax (VAT).

The Inland Revenue Department (IRD) had filed the case against the company for defaulting on tax payments owed to the government from 2016 to 2019.

The appeal was lodged in determination of it being forwarded to the Colombo High Court, however to no avail.

The appeal challenging the prison sentence was called in before Colombo Additional Magistrate Bandara Illangasinghe, after which the rejection was declared.

The appeal is also said to have requested the Court to settle the defaulted taxes in instalments.

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By: Isuru Parakrama

October 14, Colombo (LNW): The government’s much-anticipated fertiliser subsidy programme is set to commence today (14), according to Minister Vijitha Herath.

The initiative aims to provide crucial support to farmers across the country, beginning with the agricultural heartland of Ampara District.

Under the first phase of the scheme, eligible farmers will receive Rs. 15,000 to help mitigate the rising costs of fertiliser and other essential inputs.

In the subsequent second phase, an additional Rs. 10,000 will be disbursed, ensuring sustained support throughout the upcoming planting seasons.

Minister Herath highlighted that the distribution would initially focus on Ampara but is slated to quickly expand to cover other key agricultural regions.

Farmers in Polonnaruwa, Anuradhapura, and the Mahaweli Zone will be amongst the next to benefit from the subsidy, as the government moves swiftly to extend relief to those impacted by rising global fertiliser prices and economic challenges, he emphasised.

With this subsidy programme in motion, the government is aiming to enhance productivity and ensure that farmers can access necessary resources to meet growing demands.

Minister Herath underscored the importance of efficient implementation, noting that this timely financial support could play a significant role in boosting both crop yields and farmers’ incomes.

By: Isuru Parakrama

October 14, Colombo (LNW): The Election Commission has released a press release announcing the names of the candidates who tendered their presidential election expenditures.

As of now, 35 candidates have tendered their election expenditures, according to the Commission.

By: Isuru Parakrama

October 14, Colombo (LNW): The Attorney General’s Office has informed the Supreme Court that the Cabinet has decided to resort to reconsideration pertaining to the proposed wind-power project in Vedithalativ, Mannar being handed over to India’s Adani Company.

This was when the fundamental rights (FR) petition demanding the nullification of the agreement reached between the government of Sri Lanka and the Adani Company on the wind-power project was called in before the Supreme Court bench comprising Justices S. Thurairajah, A.H.M.D. Navaz, Shiran Gunathillake, Achala Vengappuli and Mahinda Samayawardhana today (14).

The petition was lodged by a group of civil activists, including the Wildlife and Natural Resources Protection Association and the Centre for Environmental Justice. Deputy Solicitor General Dr. Avanthi Perera appearing for the AG’s Office has informed the aforementioned decision to the apex court.

Matters involving the execution of the proposed wind-power project were to be reconsidered by the Cabinet on October 07, Deputy Solicitor General Dr. Avanthi Perera, on behalf of the Cabinet Secretary and the Minister of Energy, told Court, revealing that the content of the said agreement between the government of Sri Lanka and Adani are being reviewed and the execution of the project, thereafter, will be reconsidered.

She further informed the Court that the current interim Cabinet of Ministers has made this decision, and requested fixation of a date for the announcement of any final decision on the execution of the project to be made by the new Cabinet post-election.

The Deputy Solicitor General further informed orally that the current state of affairs of the project is being maintained until due course.

Expressing approval for the information tendered by the Deputy Solicitor General, the petitioners requested the Court to grant permission to add amendments to the petition by including the members of the Cabinet pending appointment, in the event that a change of the respondents cited in the petition has occurred succeeding the recent regime change.

Considering the facts, the Supreme Court has granted permission for the addition of amendments to the petition, and ordered that any observation pertaining to the matter from the government’s end be informed before January 31, 2025.