SJB alleges NPP goes back on election promise to reduce borrowings

By Yohan Perera   

Former MP and former Chairman of the Committee on Public  Finance Harsha de Silva said the electoral pledge made by the National  People’s Power (NPP) in the political platform has proven to be  unrealistic.   

Dr. de Silva told a media briefing that the only option  available for the government is to borrow funds from financial markets.   

 “NPP said during the election that borrowings will be  reduced or stopped if they come to power. However, the present government  has been compelled to borrow from the market almost every week as there  is no other way to raise funds. Sri Lanka has to maintain a primary  account surplus. This is in line with the Public Finance Management Bill.  The accepted norm is that primary account surplus could be used to  settle loans. Therefore, the government will have to generate funds to  settle loans if the primary account surplus is insufficient. There are  two ways in which the government could raise funds. One is to borrow from  the market and the other is to print money. It is not possible to print  money as per the agreement reached with the IMF. Therefore, the only  option available is to borrow from the market. This is what the  government is doing now. The government is unable to fulfil the promise  it made at the political platform,” the former MP said.   

Meanwhile, SJB Leader and former Opposition Leader Sajith  Premadasa questioned as to whether the new government has discussed the  tax cuts with the IMF and as to when it will be introduced.   

“Those in the NPP government met the IMF officials  recently. We would like to know whether the government discussed the  revision of direct and indirect taxes with the IMF officials,” Mr.  Premadasa questioned during a public gathering in Avissawella.   

“We in the opposition had a dialogue with the IMF officials  during the recent past. We told them that taxes would have to be reduced  if the people endorsed our policy of reducing the tax burden at the  Presidential Election. IMF officials ensured that they would have to  agree to tax cuts in line if Sri Lankan people gave a mandate for it.  We will come up with the same pledge at the General Election as well.  We will work out a tax relief package for the people with IMF if our  party obtains a majority in the House. Therefore, people have one more  opportunity of enjoying a tax relief,” he said.