Feb 20, Colombo: Sri Lanka's Marxist party Janatha Vimukthi Peramuna (JVP) warns that the country's economy is facing a downfall in several sectors.

JVP parliamentary group leader Anura Kumara Dissanayake said that the production sector has fallen with even the government's initiatives, Api Wawamu, Rata Nagamu, and Divi Neguma, that were aimed at increasing production becoming a damp squib.

He noted that the garment industry is affected by the loss of the GSP plus facility.

"Apart from the production process, a large number of large-scale development programmes have turned out to be white elephants where the country's economy is concerned," Dissanayake said.

He explained that projects like the Southern Expressway and the Hambantota Port are not linked to the country's economic activities.

"One of the reasons for the current economic crisis is the lack of a connection between the development projects and the country's economy," he said.

He added that the losses in state institutions and wastage have compounded the crisis.

Citing examples, Dissanayake pointed out that SriLankan Airlines had recorded a loss of Rs. 19 billion in 2011 and the CPC recorded a loss above Rs. 100 billion in 2012.

"There's wastage in maintaining a jumbo Cabinet, holding night races and overseas jaunts of the President and government ministers. All these have burdened the country's economy," he observed.

According to Dissanayake, the debt taken by the government is also affecting the economy on another side.

The government has estimated revenue of Rs. 1,304 billion for 2013, which it would not earn. However, loans to be taken for 2013 are estimated at Rs. 1,303 billion.

"The government seems to be trying to run the country on monies earned through revenue for six months and the remaining six months on loans," Dissanayake said.