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Leading News from Sri Lanka ::
July 30, Colombo: Sri Lanka main opposition United National Party (UNP) today alleged that though the government claimed there were no conditions for the IMF loan, there are in fact 11 conditions pertaining to it.
Speaking at a special press briefing held in Colombo this morning Colombo District parliamentarian Ravi Karunanayaka said that it would be impractical for the government to fulfill the conditions agreed upon with the International Monetary Fund (IMF) for the Stand by loan of US $ 2.6 billion.
The Central Bank of Sri Lanka last week made public the Letter of Intent (LOI) that it submitted to the IMF to secure the loan facility.
MP Karunanayaka said one condition is the reduction of expenditure and increase of revenue. The main opposition UNP pointed out that the taxes will have to be imposed to meet the conditions of the IMF increasing the burden further on the masses.
The LOI states that the government is committed to increasing tax revenue by at least 2 percent of GDP by 2011 with measures to broaden the revenue base, significantly reduce tax exemptions, and further improve tax enforcement.
According to the Memorandum of Economic and Financial Polices signed with the IMF, the government should prune the budget deficit from present nine percent to five percent by 2011, UNP said.
MP Ravi Karunanayaka stressed that the government had agreed to the condition that the Ceylon Petroleum Corporation and the Ceylon Electricity Board, which currently run at a colossal loss, should reach profitable levels by 2011.
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