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SL’s Insurance Sector faces challenges amid limited transparency and low penetration: Fitch

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By: Isuru Parakrama

December 11, Colombo (LNW): Fitch Ratings has highlighted the evolving but somewhat opaque regulatory environment in Sri Lanka’s insurance industry, describing it as one that is “developing with limited transparency”.

This assessment points to the challenges faced by both the industry and regulators in fostering a more transparent and sophisticated market.

The report referenced the Insurance Regulatory Commission of Sri Lanka (IRCSL), which has been responsible for overseeing the country’s insurers.

In an effort to strengthen the sector, the IRCSL introduced a risk-based capital (RBC) framework in 2015, which was fully implemented by insurers in 2016.

Under this system, insurers are required to maintain a minimum RBC ratio of 120 per cent. Companies that fail to meet a ratio of 160 per cent must submit a plan to enhance their capitalisation.

Whilst these measures are aimed at improving the financial stability of insurers, the report suggests that the regulatory framework still lacks the clarity and transparency needed to facilitate smoother operations within the sector.

Additionally, the commission has enforced rules aimed at separating life and non-life insurance operations.

It has also mandated that all insurance firms be listed on the local stock exchange, a move intended to increase accountability and transparency.

However, some exceptions are made for insurers whose parent companies are already listed on an internationally recognised stock exchange, which may limit the overall impact of this requirement.

Fitch’s analysis also points to Sri Lanka’s insurance market, which remains one of the least penetrated in Asia. The market is still underdeveloped, with both life and non-life insurance sectors dominated by basic products.

This lack of sophistication leaves many opportunities untapped and presents significant challenges for growth and diversification.

In the non-life insurance sector, motor insurance remains the dominant force, making up more than half of all premiums. However, restrictions on vehicle imports, which have persisted for some time, have forced insurers to broaden their offerings.

As a result, sectors such as health insurance and miscellaneous types of coverage have seen growth, along with fire and property insurance.

Additionally, small and medium-sized enterprises (SMEs) have contributed to the rise in business-related insurance, driven by the increased pace of construction and a growing number of commercial ventures.

The life insurance sector is also undergoing a transformation, albeit at a slower pace. Traditional whole-life and endowment policies, particularly those with investment features, continue to lead the market.

Despite pure protection policies being gradually gaining popularity, their uptake remains limited when compared to other Asian markets, Fitch noted.

This can largely be attributed to the relatively low demand for such products in Sri Lanka, as many individuals continue to favour policies that offer more immediate returns or savings components.

In layman’s terms, whilst there have been some regulatory and product developments in Sri Lanka’s insurance sector, challenges remain, particularly in terms of market sophistication and the transparency of the regulatory framework.

Chief Justice Murdu Fernando commits to strengthening judiciary’s independence and integrity

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By: Isuru Parakrama

December 11, Colombo (LNW): Chief Justice Murdu Fernando PC was formally welcomed to the Supreme Court as the nation’s 48th Chief Justice.

During the ceremonial sitting held in her honour, Justice Fernando pledged her dedication to upholding the integrity, independence, and dignity of the judiciary, vowing to serve as an impartial guardian of justice.

Fernando, who becomes the second woman to hold the esteemed office after Dr. Shirani Bandaranayake, expressed her firm belief in the importance of a judiciary that is transparent, accountable, and accessible to the people.

She stressed the need to strengthen the Rule of Law and continue to build a legal system that operates with fairness and equity.

Speaking to an audience of esteemed judges from the Supreme Court, Court of Appeal, High Courts, District Courts, and Magistrate’s Courts, Justice Fernando remarked, “The judiciary is like a steadfast army, tasked with defending the fortress of democracy against the threats of injustice. Our armour is the law, provided to us by the legislature, and our mission is to protect the rights and freedoms of our citizens.

Reflecting on her new responsibilities, she emphasised the profound role justice plays in the daily lives of the nation’s people.

Justice is not merely an abstract concept; it is a living force that influences the lives of families, communities, and the nation as a whole. As we look to the future, it is our solemn duty to ensure the rule of law is applied fairly and impartially, without bias or favour. Every individual who seeks justice in this institution, no matter their background, should find a system that listens, understands, and strives to protect their rights.

The Chief Justice’s comments resonated with a clear message of commitment to safeguarding justice for all citizens, ensuring that the legal system remains a beacon of impartiality and fairness.

She reiterated her vision for a judiciary that stands as a pillar of democracy, accountable to the people and unwavering in its role as an independent arbiter.

The ceremony began with speeches from key figures in the legal community, including Attorney General Parinda Ranasinghe (Jnr), PC, and the President of the Bar Association of Sri Lanka, Anura Meddegoda, PC.

Their remarks highlighted the significance of the occasion and the trust placed in Justice Fernando to lead the judiciary during this pivotal time.

In her closing remarks, Justice Fernando expressed heartfelt gratitude to those who have supported her throughout her journey, including her family, in-laws, extended family, and friends, who have been instrumental in her achievements.

She acknowledged the invaluable guidance and encouragement she has received from her loved ones, which has shaped her path to the highest office in the judiciary.

Concerns mount over CEB’s decision to purchase power from private thermal plants

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December 11, Colombo (LNW): The Technical Engineers and Supervisors Association of the Ceylon Electricity Board (CEB) has raised serious concerns about the state-owned utility’s decision to continue purchasing electricity from private thermal power plants, despite recent rainfall filling the reservoirs of hydroelectric plants to full capacity.

Nandana Udayakumara, Vice President of the association, has called for an immediate investigation into the procurement of power from the private sector, questioning the rationale behind such decisions when the country’s hydro-power plants are primed to meet demand.

He also questioned who truly benefits from these transactions.

After recent heavy rainfall, the reservoirs supporting our hydro-power plants are at their maximum levels, which should have made hydroelectric generation the priority,” Udayakumara explained. “Furthermore, the Norochcholai coal power plant is fully stocked with coal, meaning it is also capable of operating at full capacity.

However, Udayakumara pointed to what he described as an inconsistency in the CEB’s operations. According to his observations, the Norochcholai plant was not fully utilised in recent days.

Records from last week show that only two-thirds of the Norochcholai plant was operational, and one of its units was functioning at a fraction of its capacity. Despite this, the CEB continued to buy electricity from private thermal power plants,” he said, adding that the decision appeared both unnecessary and financially questionable.

The association has raised concerns over the timing of these power purchases. Given that both hydroelectric plants and the Norochcholai plant could have met the nation’s electricity needs, the choice to rely on private thermal plants has left many puzzled.

When both the hydro-power plants and Norochcholai are capable of providing sufficient electricity, one has to wonder why the CEB is still opting to purchase power from private sources,” Udayakumara remarked. “It’s essential to understand who stands to gain from these purchases, and why this decision was made when other, more sustainable options were available.

Most parts in island to meet showers, thundershowers: North may suffer heavy showers above 100mm (Dec 11)

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By: Isuru Parakrama

December 11, Colombo (LNW): The low-pressure area over the southwest Bay of Bengal is very likely to continue to move west-northwestwards towards the Tamil Nadu coast close to Northern Sri Lanka during the next 24 hours, the Department of Meteorology said in its daily weather forecast today (11).

Showers or thundershowers will occur at times in Northern, North-central, Eastern and North-western provinces.

Heavy showers above 100mm are likely at some places in Northern province.

Showers or thundershowers may occur at several places elsewhere during the evening or night.

Misty conditions can be expected in Central, Sabaragamuwa, Southern, Uva, Western and North-western provinces during the morning.

The general public is kindly requested to take adequate precautions minimise damages caused by temporary localised strong winds and lightning during thundershowers.

Marine Weather:

Naval and fishing communities are warned not to venture to the deep and shallow sea areas off the coast extending from Puttalam to Mullaitivu via Kankasanthurai and Mannar today (11).
Condition of Rain:
Showers will occur at times in the sea areas extending from Trincomalee to Puttalam via Kankasanthurai and Mannar.Showers or thundershowers will occur at a few places in the other sea areas around the island.
Winds:
Winds will be North-easterly to North-westerly in the sea areas extending from Trincomalee to Galle via Kankasanthurai and Colombo. Wind speed will be (30-40) kmph. Wind speed can increase up to (50-60) kmph at times in the sea areas extending from Trincomalee to Puttalam via Kankasanthurai and up to 50kmph in the sea areas extending from Puttalam to Galle via Colombo. Winds will be variable in direction in the other sea areas around the island and wind speed will be (25-35) kmph.
State of Sea:
The deep and shallow sea areas off the coast extending from Puttalam to Mullaittivu via Mannar and Kankasanthurai will be rough to very rough at times and the sea areas extending from Puttalam to Galle via Colombo can be fairly rough at times. The other sea areas around the island will be moderate. Temporarily strong gusty winds and very rough seas can be expected during thundershowers.

Sri Lanka Original Narrative Summary: 11/12

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  1. Preliminary discussions for the 2025 Budget proposal have begun under President Anura Kumara Dissanayake’s leadership: A key discussion focused on the Ministry of Education’s budget proposals took place yesterday (10) at the Presidential Secretariat in Colombo: The meeting involved Prime Minister Dr. Harini Amarasuriya, Education officials, and senior ministry representatives, as reported by the President’s Media Division.
  2. A video has emerged on social media showing Jaffna MP Archchuna Ramanathan allegedly demanding a hospital official address him as “sir”: In the video, the individual, whose face is not shown, tells the hospital official, “You have to call me ‘sir’ whether you like it or not. I am a member of Parliament”: The incident has sparked controversy online.
  3. The New Democratic Front (NDF) has informed the Election Commission that Faiszer Musthapha has been nominated for a National List MP seat: Musthapha, a former Minister of Sports and Provincial Councils, is a senior lawyer and politician: The NDF, formed by the UNP, SLFP, and Podujana Eksath Nidahas Peramuna, won three parliamentary seats and two National List seats in the 2024 General Election: The nomination of Ravi Karunanayake for one seat faced internal backlash, leading to a committee being formed to address the controversy.
  4. A controversy has arisen over Speaker Asoka Ranwala’s alleged doctorate, with opposition parties demanding clarification on whether he truly holds a PhD: The Speaker had used the title “Dr.” before his election and was listed as “Dr. Asoka Ranwala” on the Parliament’s official website: However, questions emerged on social media regarding the legitimacy of his doctorate, especially after the title was removed from the site: Ranwala has promised to address the issue at the appropriate time.
  5. Cabinet Spokesperson Dr. Nalinda Jayatissa revealed that liquor companies owe nearly Rs. 7 billion in taxes, with the government taking steps to recover the dues: His comments addressed ex President Ranil Wickremesinghe’s defence of his administration’s liquor licensing practices, emphasising the need for tax enforcement. Jayatissa criticised the previous government’s failure to collect taxes and highlighted ongoing efforts to recover the outstanding amounts.
  6. The Sri Lankan government has requested a loan from the OPEC Fund for International Development to finance its Comprehensive Reform Agenda, aligned with the IMF’s Extended Fund Facility (EFF): The OPEC Fund has agreed to provide a USD 50 million policy-based loan, which has been confirmed by the IMF as consistent with the EFF programme: The proposal has received Cabinet approval.
  7. Over 900 candidates from the General Elections failed to submit their income and expenditure reports to the Election Commission by the December 6 deadline: Of the 8,361 candidates, 949 did not comply, including 93 of the 527 national list members: Election Commission Chairman R. M. A. L. Rathnayake stated that violators would face legal action, with their names being forwarded to the police.
  8. UN Resident Coordinator in Sri Lanka, Marc-André Franche, expressed hope that the new government’s commitment to human rights will be meaningful and not just for show: Speaking at the International Human Rights Day commemoration, he acknowledged the government’s pledges: The Human Rights Commission of Sri Lanka launched four publications, including reports on workers’ rights, human rights defenders, and disability-friendly employment.
  9. The Catholic Bishops Conference in Sri Lanka clarified that self-crowned prophet Pastor Jerome Fernando is not a Catholic Bishop, as he lacks official apostolic succession: A statement from the Conference, signed by Secretary General Rev. J. D. Anthony Jayakody, urged the faithful not to be misled: It explained that Catholic Bishops are direct successors of Jesus’ apostles, with the Pope as the successor of St. Peter.
  10. Sri Lanka’s hopes of reaching the ICC World Test Championship final were dashed following a 2-0 series defeat in South Africa: Despite valiant efforts from Dhananjaya de Silva and Kusal Mendis, Sri Lanka fell short, losing by 109 runs in the second Test: Head coach Sanath Jayasuriya attributed the loss to missed opportunities, particularly failing to convert starts into big scores: Key moments, including South Africa’s tail adding crucial runs and Sri Lanka’s batting collapse, were identified as turning points: Jayasuriya also praised Kamindu Mendis’ positive approach, despite his underwhelming performance in the series.

After Assad: Is Syria the New Libya in the Mediterranean?

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After Assad: Is Syria the New Libya in the Mediterranean? is a provocative and unrelenting dissection of a nation’s catastrophic descent into turmoil. Journalist Nilantha Ilangamuwa crafts a compelling narrative that examines the seismic aftermath of Bashar al-Assad’s fall. The book does more than recount events—it compels readers to confront the intricate web of foreign interventions, regional ambitions, and internal fractures that have turned Syria into a theatre of devastation.

“I penned this brief reflection on Syria, driven by curiosity and compassion, but shaped by personal experiences that linger heavily in my thoughts. My encounters with Syrian journalists, politicians, and social activists during workshops and international seminars in cities such as Beijing, Tehran, Cairo, Doha, and Florence brought profound insights into a nation disintegrated by war and greed,” Ilangamuwa writes, adding, “If you travel at night from Tehran to Doha at lower altitudes, the contrast becomes brutally clear: one side sparkling with skyscrapers and lights, the other cloaked in darkness, a stark symbol of neglect and the endless weight of conflict. This image offers a haunting reminder of disparities and how ambitions have torn apart a once vibrant region.”

The book draws haunting parallels between post-Assad Syria and Libya following Gaddafi’s collapse. “The looting, territorial gains, and competing military interventions currently unfolding paint a grim picture of Syria’s precarious future,” the author writes, comparing the destruction of Syria’s institutions to Libya’s infamous descent into chaos.

What makes this work particularly impactful is the way it contextualises Syria’s tragedy within the broader dynamics of global power. The author is unsparing in his critique of foreign players. “Turkey’s strategic ambitions—particularly its desire to remove Kurdish autonomy—mirror its actions during the Syrian refugee crisis,” he notes, highlighting calculated geopolitical manoeuvres that prioritise power over humanitarian concerns. Similarly, Israel’s incursions into the Golan Heights and the United States’ shifting alliances are scrutinised with incisive detail. The author does not hesitate to label these actions as part of a broader strategy of exploitation. “Syria is not merely a battleground between Assad and his opposition. It is the epicentre of competing strategic goals,” he declares.

The book also examines internal struggles that exacerbate Syria’s plight. The rise of extremist factions like Hayat Tahrir al-Sham, the fracturing of opposition forces, and the manipulation of local conflicts by external actors are portrayed as symptoms of a deeper malaise. “What began as a cry for dignity and justice has now devolved into a battleground for dominance,” the author observes, driving home the tragic irony of Syria’s uprising. The 112-page book is available on Amazon (https://a.co/d/0CJlhDx). After Assad is an indispensable resource for anyone seeking to understand the complexities of post-Assad Syria. It is a masterfully written, deeply thought-provoking work that demands to be read and reckoned with.

Govt Seeks U.S. Support in Renewable Energy amid Adani Project Scrutiny

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Sri Lanka has approached the United States for assistance in advancing its renewable energy sector, despite significant Indian investments, including by the Adani Group. Energy Minister Kumara Jayakody made this appeal during a meeting with U.S. Ambassador Julie Chung on December 9 to explore cooperation in the energy sector.

According to the Energy Ministry, Minister Jayakody shared the government’s vision for energy development, emphasizing a transition to renewable sources. The Ambassador responded positively, stating, “The U.S. government is ready to provide technical and other assistance to Sri Lanka’s power sector.”

The United States has been a long-time supporter of Sri Lanka’s renewable energy goals, providing initiatives such as a $19 million, five-year Energy Program designed to help the nation achieve 70% renewable energy generation by 2030. The U.S. has also backed projects to develop Sri Lanka’s electric vehicle sector.

Adani Projects under Review

This move comes as President Anura Kumara Dissanayake’s administration has pledged to re-examine India’s Adani renewable energy projects in Sri Lanka, following recent allegations of fraud against eight Adani Group executives, including its Chairman Gautam Adani, by U.S. prosecutors in New York.

The Adani Group had proposed a $442 million wind energy project in Mannar and Pooneryn, which includes a 234 MW wind farm approved earlier this year. However, the projects have sparked public and environmental concerns. Critics, including the Bishop of Mannar and environmentalists, argue the wind farms threaten migratory bird routes along the Central Asian Flyway, marine ecosystems, and local livelihoods.

Dr. Jagath Gunawardana, an eminent environmental lawyer, noted that the Adani Group’s Environmental Impact Assessment (EIA) failed to meet basic legal requirements under Sri Lanka’s National Environment Act. “The project does not adequately present alternatives as required,” he said.

Environmental Concerns and Mitigation Efforts

The Sri Lanka Sustainable Energy Authority (SLSEA) and the Central Environmental Authority (CEA) are currently reviewing the project following public consultations. Critics worry that the proposed 52 wind turbines, each with a 5.2 MW capacity, could become a “death trap” for migratory birds.

Senior Prof. Devaka Weerakoon of the University of Colombo led the EIA, incorporating data from organizations such as the Ceylon Bird Club and the Field Ornithology Group of Sri Lanka. The assessment suggests mitigation strategies to reduce environmental harm.

An Adani Group spokesperson, Jamien Boulton, defended the project, emphasizing the use of modern technology to minimize its environmental footprint. “For the first time in Sri Lanka, 5.2 MW Wind Turbine Generators, among the most powerful onshore turbines globally, will be deployed,” he said.

 Boulton added that AI-based radar systems would detect incoming bird flocks, prompting automatic turbine shutdowns during high-risk periods. Other measures include painting turbine blade tips to deter birds and using taller turbines with slower blade speeds to reduce collisions.

Despite these assurances, local environmentalists remain concerned, calling for stricter reviews and sustainable alternatives. As Sri Lanka courts U.S. support to meet its renewable energy goals, the fate of the Adani projects remains uncertain, pending further technical and environmental assessments.

US imposed Sanctions on 14 alleged for Corruption in Controversial MiG Deal 

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The United States State Department has imposed sanctions on 14 individuals, including former SriLankan Airlines CEO Kapila Chandrasena and ex-Sri Lankan ambassador to Russia, Udayanga Weeratunga, over significant corruption. 

These sanctions bar the individuals and their immediate families from entering the U.S., citing the Foreign Operations and Related Programs Appropriations Act, Section 7031(C).

The corruption allegations center around two major scandals: bribery involving the purchase of Airbus aircraft and irregularities in a MiG aircraft procurement deal. Both cases highlight deep-rooted issues of governance and accountability in Sri Lanka, with political and financial repercussions continuing to surface.

Airbus Bribery Scandal

Kapila Chandrasena is accused of accepting substantial bribes to secure Airbus purchases at inflated prices for SriLankan Airlines. Investigations in the UK revealed that his wife had received $2 million in bribes, but the fate of an additional $14.84 million remains unclear. 

Reports suggest that these funds may have been funneled into private accounts, raising questions about broader complicity within the administration.

This scandal implicated key political figures, including Nishantha Wickremesinghe, the airline’s then-chairman and brother-in-law of former President Mahinda Rajapaksa. Critics argue that the close ties between the airline’s management and political leadership facilitated unchecked corruption.

Further controversy erupted when the subsequent government canceled the Airbus order without consulting legal authorities, resulting in $115 million in upfront penalties and billions more in damages. This decision, aimed at breaking ties with corrupt practices, ironically plunged Sri Lanka into greater financial losses.

The MiG Aircraft Deal

The MiG deal, another cornerstone of the sanctions, revealed alleged corruption tied to Sri Lanka’s military procurement. In 2006, former Sri Lanka Air Force (SLAF) Commander Donald Perera proposed an open tender to acquire MiG-27 aircraft. 

However, this process was bypassed after Udayanga Weeratunga, who later became Sri Lanka’s Ambassador to Russia, introduced Ukrainian and Singaporean businessmen to Gotabaya Rajapaksa, then Defense Ministry Secretary.

The aircraft were purchased through Ukrinmash, a Ukrainian company, under what was purported to be a government-to-government contract.

 However, investigations uncovered that over $14 million was funneled to Bellimissa Holdings Ltd., a private UK-based entity. The Ukrainian government denied any connection between Ukrinmash and Bellimissa Holdings, pointing to potential embezzlement of state funds.

Fallout and Political Accountability

The combined scandals have ignited intense political debates, with opposition figures and civil society demanding greater transparency and accountability. Critics have pointed to the lack of oversight in SriLankan Airlines’ procurement processes, questioning how an airline with assets worth $17 million could commit to a $2.8 billion deal without proper legal or financial safeguards.

These cases also cast a shadow on Sri Lanka’s political elite, with allegations of systemic corruption during the Rajapaksa administration. While the government has vowed to pursue justice, the country faces an uphill battle to recover financial losses, rebuild its international reputation, and restore public trust.

The Airbus and MiG scandals underscore a larger challenge for Sri Lanka: addressing entrenched corruption and ensuring that governance reforms are more than just political rhetoric.

NSBM celebrates the success of the Graduating Class of 2024 at the grandiose NSBM Convocation Week!

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NSBM Green University, the premier degree awarding institute in Sri Lanka, commenced its annual General Convocation Week for 2024 yesterday (9th December). This ceremonious celebration of NSBM’s graduating Class of 2024 is scheduled to extend until 11th December, encompassing 9 distinct sessions at the NSBM Auditorium with renowned guests, scholars, parents, and students serving as distinguished patrons. During Convocation Week, the university ceremonially confers degrees to over 1500 graduands representing its faculties of Business, Computing, Engineering, Science and Postgraduate Studies.

Day 1 of the ceremony featured 3 sessions where graduates of the Business and Computing degree programs offered by NSBM Green University, as well as those earning degrees in affiliation with University College Dublin, Ireland, were conferred their degrees. Each session was honoured by the presence of distinguished Chief Guests, who delivered inspiring and motivational addresses that brought encouragement and insight to the graduates and the audience.

The first session was graced by Mr. Duminda Hulangamuwa, Chairman of The Ceylon Chamber of Commerce, and Session 2 was honoured by Mr. Arjuna Herath, Chairman of the Board of Investment of Sri Lanka, while the third session saw the distinguished presence of Dr. Harsha Cabral, President’s Counsel.

Adding to the glamour of the day was the presence of the Vice-Chancellor of NSBM, Prof. E A Weerasinghe, Deputy Vice-Chancellor, Prof. Chaminda Rathnayake, Head of Academic and Quality Assurance, Prof. J. Baratha Dodankotuwa, Deans, Heads, and Academics of NSBM.

The festivities of NSBM Convocation Week 2024 are set to continue in grandeur. In the days ahead, the ceremony shall confer the well-deserved degrees to students who undertook undergraduate degree programs at NSBM Green University in affiliation with prestigious foreign universities: University of Plymouth, United Kingdom, and Victoria University, Australia. Distinguished dignitaries, renowned academics, foreign diplomats and representatives of the foreign partner universities are invited to grace the upcoming sessions with their courteous presence.

Please contact Mr. Venura Colombage- Head of Marketing, for further information.

Email: [email protected] | Mobile: 0715837369

Ceylon Teachers’ Union Demands Clarity on Allowances for A/L Examination Duties

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The Ceylon Teachers’ Union (CTU) has urged the government to address discrepancies in the payment of allowances for principals and teachers participating in the 2024 G.C.E. Advanced Level (A/L) examination duties.

CTU General Secretary Joseph Stalin, speaking at a press conference, raised concerns about conflicting directives from the Commissioner General of Examinations regarding transportation allowances for examination staff.

Stalin revealed that a circular issued on November 11 promised a transportation allowance of Rs. 1,000 for staff traveling more than 10 kilometers to an exam center. However, a subsequent circular issued on December 12 significantly reduced these allowances.

  • For distances over 10 kilometers: allowance reduced from Rs. 1,000 to Rs. 500.
  • For distances between 5 and 10 kilometers: reduced from Rs. 750 to Rs. 400.
  • For distances between 2 and 5 kilometers: reduced from Rs. 500 to Rs. 300.
  • For distances less than 2 kilometers: reduced from Rs. 300 to Rs. 200.

“This sudden reduction has created confusion and frustration among exam invigilators, who are already working under challenging conditions,” Stalin said.

He stressed the importance of fair compensation to maintain the morale and efficiency of the examination staff and called on the government to resolve the issue promptly to ensure smooth functioning of the ongoing examination process.