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New year bonanza
Government announces massive rate cuts
By Kelum Bandara, Sandun A Jayasekera and Yohan Perera
Thegovernment yesterday announced massive rate cuts on many items,including fuel and gas, which will take effect from today. Theannouncement was made with the provincial council elections scheduledto take place in five weeks time.
The ‘economic stimuluspackage’ for consumers, industrialists, exporters and the plantationsector, worth a total of Rs 16 billion, came after a special Cabinetmeeting summoned by President Mahinda Rajapaksa last night.
Accordingly,the price of diesel was to be reduced by Rs. 10 a litre from midnight,kerosene by Rs. 10 a litre and furnace oil by Rs. 10 a litre. Thepetrol price was to be cut by Rs. 20 a litre for three-wheel ownersaccording to a coupon system. They can buy up to four litres of petrolper day at this subsidised price, subject to a limit of 75 litres amonth. For other sectors, the price of petrol will be reduced only byRs. 2 per litre.
Trade, Commerce and Consumer Affairs MinisterBandula Gunawardane told a news conference last night that this reliefpackage was granted to the people on New Year’s eve. The minister saidthat Cabinet had also decided to reduce the charge for refilling aLaugfs gas cylinder by Rs. 276 and a Shell gas by Rs. 166 frommidnight.
At the same time, Cabinet decided to reduce stateexpenses by five percent, MPs expenses by five percent, ministers’expenses by ten percent and the President’s and Prime Minister’sexpenses by 15 percent. Also, the monthly rent allowance of Rs.100, 000given to ministers will be cut by 50 percent. A sum of Rs 3 billionwould be saved by these cuts according to the government.
InvestmentPromotion and Enterprise Development Minister Dr. Sarath Amunugama saidthat the government’s objective was to sustain the country’s economicgrowth rate at six percent during the next year as well, despite theimpact of the global economic meltdown.
To achieve this target,the minister said, a relief package was given to the plantation sectorwhich had been hit hard by the global situation today.
Dr.Amunugama said that capital loans would be provided to the teaindustrialists at a concessionary interest rate, and the recovery ofalready granted loans would be suspended for the next year. The cesslevied on tea imports would be increased to protect local production.
“Wewill purchase tea through State Trading Institutions to be supplied toIran and Russia on credit. Mixed fertiliser will be issued to teasmallholders at Rs. 1000 per bag of 50 kilos. These facilities willmake the tea industry a viable one,” he said.
For the tourismsector, debt relief will be given. The government will guarantee astable price of Rs. 150 for a kilo of rubber next year, and anadditional five percent cess will be imposed on rubber imports tosustain the local production. There will be concessions for thecinnamon plantation sector as well, he said..
Non-Cabinet MediaMinister Lakshman Yapa Abeywardane said that plans would be put inplace to give a stable price of Rs. 45 for a kilo of tea leaves, andRs. 300 for a kilo of manufactured tea.
Export Developmentand International Trade Minister Prof. G.L.Peiris said that incentiveswere given to the industrial sector to ensure that there would not beany loss of employment in any of the sectors.
The concessionsgiven to the industrial sector were the removal of the 15% electricitysurcharge and a 5% allowance on the value of exports if theindustrialist was able to maintain his former production level. Earlierin the evening President Rajapaksa, speaking at the Sri Lanka TransportBoard (SLTB) golden jubilee ceremony at the BMICH, said the governmentwas serving a large majority of the people and not just the 4% of 5%who comprise the affluent minority.
“The policy of thegovernment is to fully participate in the economic activities. Acountry cannot achieve economic progress without the activeparticipation of the government in the economy. We will never letunscrupulous traders to control the economy,” he said.
Those whodestroyed the country’s economy by selling state assets like theEmbilipitiya and Valaichchenai paper factories, the Thulhiriya textilemill, Air Lanka, the CWE and state plantations for a pittance are nowtrying to become saviours. Not satisfied with that, they even attemptedto sell the Sinharaja forest and the water in Kala-Wewa. The peoplehelplessly watched all these acts of destruction to the nationaleconomy, he said. President Rajapaksa said the government subsidiseddiesel and kerosene using the profits collected from the sale of petroland that the government always acte in the larger interests of thepublic and the overall economic situation in the country.
“Wemust consider whether the country would benefit more from the pricereduction of petrol or diesel. We have to confront challenges, if thegovernment does not reduce the price of petrol. It is natural that anygovernment faces many challenges when serving the people. Buses, trainsand other public vehicles run not on petrol but on diesel. If thegovernment is to give relief to the people it is through the reductionof diesel prices,” he said.
The year 2009 will be the year ofvictory and the year of unity, integrity and peace for all citizens.The day is not too far when people in the south will travel to thenorth to spend a holiday in a peaceful atmosphere and vice-versa.
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