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* Government gets cabinet nod for measures to control economy amid challenges to global economy from COVID-19
Fri, Mar 20, 2020, 11:25 am SL Time, ColomboPage News Desk, Sri Lanka.

Mar 20, Colombo: The cabinet of ministers has given approval to implement a set of proposals put forward by President Gotabaya Rajapaksa to control the economy and provide relief to the people during the coronavirus crisis.

With the spread of the COVID-19 new coronavirus, the world economy has collapsed, and the transport, travel and aviation sectors have completely collapsed.

Although China shows signs of eradicating the risk of spreading the disease because of the initiatives taken by China to control and prevent the disease at the outset of the epidemic, the new coronavirus has spread too many countries, including the developed world by now.

Under these conditions, Government intervention is essential to provide public health services in the country, take every possible steps to prevent the disease, provide services and supplies to a widespread area as well as to control the damage done to tourism, exports, foreign employment, IT and small business related sectors

By the time Parliament was dissolved on 2 March 2020, the Appropriation Bill for 2020 had not been presented to Parliament.

Provisions made by the Vote Account, which had been approved at the time, for drug purchases for 2019, Fertilizer procurement, settlement of bills for various constructions as well as to hold the 2020 general election were not sufficient and the

Due to the lack of support from the opposition for the proposal made by the Government to obtain the necessary funds, the government had to focus on other options in order to make the necessary provisions.

Therefore, in accordance with the powers vested upon the President by the Constitution, regulations have already been implemented in order to make provisions for those activities.

Accordingly, the following measures have been taken by the Treasury.

  • Release of Rs.10 billion to settle arrears of drug purchases.
  • Release of Rs. 500 Million for Corona Prevention Activities.
  • Release of Rs. 3 billion to settle fertilizer procurement bills.
  • Release of Rs. 5 billion to settle the bills of SME contractors.
  • Allocation of Rs. 46 billion in interest on senior citizen deposits that have not been paid for two years.
  • Provision of Rs. 8 billion to hold 2020 General Elections.
  • Due to the slowdown in the global economy, considering the risks in the economy many countries have had to resort to mid-term domestic solutions.

    Accordingly, the government is focusing on optimum returns taking into consideration the current trend in oil prices in the world market. Considering the views of the experts in the relevant fields, the following proposals are planned to be implemented.

    *Maintaining the current market oil prices with the objective of minimizing traffic congestion and facilitating the transportation of both public and private vehicles

    *Imposition of an import tax on the importation of petroleum to give the government a profit margin

    *Establishment of a Petroleum Stabilization Fund, using the savings from lower oil prices in the international market, and raising Rs. 200 billion over a period of six months

    *Payment of Rs. 50 billion to the Ceylon Electricity Board (CEB) in order to pay the debts owed to the Ceylon Petroleum Corporation (CPC) and thereby settle the debts owed by the Ceylon Petroleum Corporation to the Bank of Ceylon and the People's Bank

    *Taking into consideration the benefit of the reduction in the price of petroleum, supply of oil by CPC to the CEB at Rs. 70 per liter, thereby reducing the cost of thermal power generation by more than Rs. 30 billion settling bank loans and interest

    Considering the prevailing drought in many parts of the country and the necessity of providing essential food at reasonable prices, arrangements have been made to reduce the maximum retail price of one kilogram of dhal to Rs. 65 and the maximum retail price of 425g of canned fish to Rs. 100.

    The following concessions are also planned to ensure the sustainability of businesses in the travel, apparel and trade sectors affected by the new coronavirus.

    * Granting of six months grace period for repayment of loans obtained from banks and financial institutions.

    * Introduce flexible working hours especially in the IT and apparel sector and provide relief for payments for overtime and leave.

    * Providing working capital requirements at an interest rate of 4%.

    The proposal made by President Gotabaya Rajapaksa to proceed with the above activities, was approved by the Cabinet.

     

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