Govt. seeks $ 100 m from WB for reforms agenda

The Government is seeking $ 100 m funding from the World Bank to fast-track its economic reform plans focused on competitiveness, transparency and fiscal sustainability. 

The Cabinet paper submitted by Prime Minister Ranil Wickremesinghe as the National Policies and Economic Affairs Minister to implement the Competitiveness, Transparency, and Fiscal Sustainability Development Policy Financing program of the World Bank with the participation of other relevant agencies was approved by Cabinet. 

 “The proposed program by the World Bank has been designed to support the long term development of the economy through renewed engagement on reforms to eliminate obstacles to private sector competitiveness, enhance transparency and public sector management, and improve fiscal sustainability,” the Cabinet paper said. 

The Finance Ministry has been authorised to move ahead to enter into a financing agreement with the World Bank that will likely have to be repaid over a period of 27 years. 

The loan will provide a platform and momentum for a long-term policy reform package, which will be undertaken by the Government under three pillars. Under pillar one for enabling private sector competitiveness the Government will implement a one-stop-shop for foreign investors and reduce processing time for investment approval. 

It will also implement a Cabinet decision to draft a new Secured Transactions Bill that will include provisions to facilitate the use of movable assets as collateral for bank loans and to repeal the Secured Transactions Act No.09 of 2009.

Under the second pillar for improving transparency and public sector management the National Audit Bill, Right to Information Act and a new Public Finance Bill strengthening preparation, execution and oversight of the Budget as well as oversight of public enterprises will be monitored.

Under the third pillar of improving fiscal sustainability the Cabinet has decided to repeal the Strategic Development Projects Act No. 14 of 2008. 

The Cabinet has also approved setting up a Debt Management Unit in the Finance Ministry, according to detailed in the Cabinet paper.

Supreme Court takes up five FR petitions against VAT hike

The Supreme Court yesterday granted leave to proceed with five Fundamental Rights petitions lodged against the recent Value Added Tax (VAT) increment. The five petitioners include National Freedom Front Leader MP Wimal Weerawansa and Patriotic Bhikku Front General Secretary Bengamuwe Nalaka Thero. 

The petitioners have claimed immediate increases of VAT could not be done without amending the existing taxation law.

MP Weerawansa has contested the tax change was implemented without proper approval of the Parliament. 

The Supreme Court will decide on the petitioner’s request for an interim order to suspend the tax increase on 11 July. 

Furthermore, the Supreme Court has asked respondents to submit their objections before 30 June. (CG)

PM assures Parliament  borrowings within limits

By Ashwin Hemmathagama

Prime Minister Ranil Wickremesinghe yesterday assured the Parliament his Government has not exceeded the approved borrowing limits and stood within the agreements with international agencies even though the Auditor General’s report stated otherwise.

Explaining the impact the excessive borrowing would have in the money market and on interest rates, the Prime Minister said: “There is a clear mismatch and a problem. Once a report is published we are unable to bring in a new report according to the Standing Orders of the Parliament. 

We have met the IMF and asked them to investigate the stock of loans exceeding Rs.1.5 trillion. We need to be accountable and should be able to show how it was spent.”

Assigning the Finance Committee to investigate the questionable report PM Wickremesinghe said: “The IMF and the Treasury holds the same grounds. But how and why has the Auditor General’s report got changed? This is a serious question for which we need to find answers.  The Finance Committee should look into these issues. In case such large amounts of money came into Sri Lanka it could have increased the interest rates. We will wait for the Finance Committee report.”