President defends Independence Day celebrations budget

• Govt. has come under severe flack for its Rs.200mn allocation for the ceremony 
• Wickremesinghe says more relief earmarked to provide food and medicine to hospitals 
• Expresses hope that ongoing talks with India and China would help speed up debt restructuring 
• State Fin. Min. puts last eight years’ total foreign loans and donations at US$ 30.3 bn

Defending the money allocated to be spent on celebrating the 75th Independence Day, President Ranil Wickremesinghe yesterday told parliament that this should not be perceived as a wasteful expenditure, but an investment for the next 25 years of the country’s progress. 

There was vehement criticism against on Rs.200 million earmarked to be spent on the Independence Day celebrations next month at a time when the government coffers have run dry and people endlessly suffering from lack of food, medicine and other basic facilities. 

But, Wickremesinghe pushed back and told parliament that the government has designed programmes and allocated billions of rupees to provide food relief, stock medical supplies and establish an institutional framework to strengthen equality, social justice and contain climate change, which will lead to a better Sri Lanka by the time the country celebrates its centenary independence.    

He said the government has allocated between Rs.30 to 40 billion to stock up hospitals with medicinal drugs and expects to launch a programme to provide vulnerable families with 10 kilogram of rice for two months. 
This has become possible due to better than expected paddy seasons seen in both Maha and Yala which resulted in a paddy surplus.

“What we saw before was selling this surplus, but we won’t do that this time,” Wickremesinghe stressed.  
By last July and August Sri Lanka was on the verge of facing a severe food scarcity as paddy and other agriculture production fell sharply as a result of prolonged shortage of chemical fertiliser after the organic fertiliser  campaign in 2021 went completely awry. Things got further aggravated when food prices doubled by September last year, pushing many families into near starvation when inflation peaked at 70 percent, reaching the worst levels Sri Lanka had ever seen.  Wickremesinghe further said even amid the stretched financial conditions the government would allocate up to Rs.10 billion, up from Rs.5 billion to maintain the minimum paddy price at Rs.100 a kilo. 

“Some people accuse us of spending money on the Independence Day celebrations. But we must provide these relief to the people,” he added.Talking about the progress that the government had made on the debt restructuring front, he said talks are ongoing with both India and China to obtain their financing assurances to restructure the country’s foreign debt. 

Wickremesinghe last week met envoys from both Japan and China to advance the progress of restructuring the debt owed to those two countries while he is due to meet the Indian External Affairs Minister S. Jayshankar who is scheduled to land in Colombo tomorrow, to obtain India’s buy-in for the debt restructuring progress.

The debt talks appear to have stalled due to the failure in bringing both China and India to agree to restructure Sri Lanka’s debt owed to them which is said to be due to their conflicting geopolitical and commercial interests in Sri Lanka. “We are currently working on putting our economy back on track,” Wickremesinghe told parliament. 
“What we have to do now is to obtain the agreement from both India and China for the debt restructuring process. While we are continuing these talks, I would like to tell this assembly that these talks are already successful,” he said attempting to assuage concerns on prolonged delay in obtaining creditor assurances.  

Meanwhile, in a separate statement released by the office of the State Minister of Finance, Shehan Semasinghe gave a detailed breakdown of the total foreign debt and donations received by Sri Lanka between the beginning of 2015 through the end of last year from bilateral partners, foreign representative offices and the banks. 
According to the breakdown provided by the Minister’s office, Sri Lanka received in total US$ 29.9 billion worth loans and another US$ 348.9 million of donations during the eight years.  The Minister said the funds had been spent on what they were intended to be used for.