Harsha stoutly defends Budget

• Recounts impact of constitutional crisis 
• Expressed gratitude for Rs. 2 b allocations for ambulance service
• Says measures for students and entrepreneurs essential for growth    

Non-Cabinet Minister of Economic Reforms and Public Distribution Dr. Harsha de Silva yesterday mounted a stout defence of Budget 2019, insisting that it sought to improve the economy that was impacted by the constitutional crisis.   

Joining the debate on the first day of Budget 2019, Dr. de Silva rejected the Opposition charges to have saved the economy from the United National Party (UNP). “We respect democratic change of governments, compared to selections made using chilli powder and attacking with chairs. According to the Central Bank report, three credit rating agencies downgraded our national rating. This led to widening the economic challenge. Mahinda Rajapaksa was unable to bring in even one dollar during his 52-day tenure. Now you are leaving without listening to us. You destroyed our rating,” he said, as Opposition Leader Rajapaksa walked out of the Chamber. 

According to the Non-Cabinet Minister, the $487 million was the net foreign outflow from Government securities during that time. “The net outflows for 2018 was $893.6 million out of which 50% was taken out during the 52 days. In 2018, the rupee depreciation was 16%, out of which the depreciation during the constitutional crisis accounts for 43%. If you don’t agree, challenge the Central Bank. The total outflow of foreign investment from the secondary market accounts for $132.6 million, and out of which $96.9 million was withdrawn during the October-December period when the constitutional crisis was here. This proves how the country was damaged during the constitutional crisis,” he explained. 

“During the 2011/12 period, your Government tried to borrow through the National Savings Bank at 8.5%-9% interest rates. Fortunately, the NSB Chairman has opposed to this borrowing, fearing the high rates. You removed him and brought in a new Chairman to borrow $ 750 million. Our Government had to pay back the same $ 750 million last year. So, don’t mislead the public,” he added.

According to de Silva, during 2014, there was a deficit of Rs. 155 billion in the primary account that increased to Rs. 302 billion in 2015. “But after five decades, we were able to report a surplus in the primary account. Last year the surplus was Rs. 91 billion. This year we expect an excess of Rs. 228 billion. The primary account is important to determine the Government’s ability to meet the day-to-day expenses including debt servicing. The unpaid bills worth Rs. 138 billion incurred during your regime has been passed to us to pay. We had to pay that as soon as we came into power in 2015. You have failed to settle the Employees Provident Fund payments of 17 state establishments,” he explained.

Commending the Minister of Finance and the Minister of Health for allocating considerable amounts to widen the Suwaseriya ambulance service across the country, Non-Cabinet Minister de Silva said: “Suwaseriya ambulance has 1,500 employees. This service caters to an average of 450 sick people each day. I am thankful that Budget 2019 allocated Rs. 2000 million to expand the service and Rs. 600 million is allocated to provide the staff accommodation.”

With the Budget 2019 encouraging the younger generation to seek education on scholarships, he wanted Sri Lankans to be innovative and think out of the box. “People from rural areas came forward due to their own efforts. Rather thinking about the stomach, we need to think about how best one could go forward settling the debt and reaching development. This is a budget the United National Front has invented. Another example is the cinnamon we export. Now it is the time that we change the form of our cinnamon exports and increase value additions. My Future Loan scheme offers Rs. 1.1 million per student to be repaid within 12 years at zero interest rates. General degrees will not enable our graduates to invent. So, we want to create a social market economy based on the demand. We need to take our students to STEM education. These loans will be directly transferred to the respective higher educational institution. This is a very important feature in this Budget proposal. 

Unless we reorient the skills set, we will not be able to come out of the middle-income trap. We no longer can compete with low wages in a world where production can be shifted from country to another. We should get into the manufacturing of complex products rather concentrating on simple products, which can be copied by any other competitor,” he said. (AH)