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President Ranil Wickremesinghe left the island this morning (06) for Egypt to participate in the COP-27 Conference on Climate Change which is scheduled to be held from November 6 to 18 in Sharm El Sheikh, Egypt.

President Wickremesinghe is scheduled to address the conference on Climate Change issues in Sri Lanka and around the world, on November 7 and 8.

Concurrently, President Wickremesinghe will attend the Global Food Security Forum and the World Leaders’ Forum.

At COP 27, countries come together to take action towards achieving the world’s collective climate goals as agreed under the Paris Agreement and Convention. Building on the outcomes and momentum of COP 26 in Glasgow last year, nations are expected to demonstrate at COP 27 that they are in a new era of implementation by turning their commitments under the Paris Agreement into action.

Minister of Environment Mr. Naseer Ahamed, Senior Advisor to the President on Climate Change Mr. Ruwan Wijewardene, President’s International Affairs Director Dinouk Colambage and President’s Private Secretary Sandra Perera will be accompanying the President.

As the online system has been facilitated, no press officer, photographer or videographer from the President’s Media Division (PMD) will participate in this conference. However, all arrangements have been made by the PMD to disseminate the relevant news articles to the local media institutions.

India has pledged its full support to improve the public transport sector including railway service in Sri Lanka.

This was revealed during the discussion held between Indian Road Transport and Highways Minister Nitin Jairam Gadkari and Transport, Highways and Mass Media Minister Dr. Bandula Gunawardena held at the Transport Ministry in New Delhi, India recently.

 Transport, Highways and Media Minister Dr.Bandula Gunawardena was on a three-day visit to India with the aim of seeking Indian support to improve the public transport sector in Sri Lanka.

A number of issues related to cooperation and partnership in the transport sector between the two countries were discussed during the meeting.

Attention was also focused to obtain Indian assistance for the urgent improvement of railway service and its infrastructure in Sri Lanka.

Minister Gunawardene explained the current situation of the Transport sector in Sri Lanka while Indian Transport Minister informed about the importance of reducing dependence on fossil fuels.

Two MInister also discussed the possibility of getting electric buses from India to Sri Lanka. Meanwhile, he also pledged his support to share Indian experiences on alternative energy sources that reduce fossil fuel dependency in Sri Lanka.

During this visit to India, senior officers in (RITES), (IRCON) and (RVNL) companies met the Minister. During the discussion, he said he would seek a US$ 400 million credit line from India to improve the public transport sector in the country.

This credit line was agreed upon in 20019 by India to Sri Lanka, but it has not been obtained yet. Minister Dr. Gunawardena said that he has made a request from Indian High Commissioner Gopal Baglay in this regard. Indian High Commissioner has communicated this issue to India.

Decisions of the Cabinet of Ministers taken at the meeting held on 31.10.2022


1. Annual General Meeting of the Asian Development Bank


The Cabinet of Ministers took into consideration the main point emphasized in the speech delivered
as the chair at the business session of the summit as the representative to Sri Lanka in the governing
board of the Asian Development Bank when the Hon. President participated in the 55 th annual
general meeting of the Asian Development Bank held in Manila, Philippines on 29.09.2022 as the
Minister of Finance, Economic Stabilization and National Policies as well as the bi – lateral
discussions took place with the Chairman of the Asian Development Bank, the Finance Minister of
Japan and the president of the Republic of Philippines.


2. Restructuring of Sri Lankan Airlines Company Limited and its subsidiary companies


It has been recognized that Sri Lankan Airlines Company Limited as well as its subsidiary
companies are needed to be restructured by handing over a considerable amount of shares and the
management of the entity of Sri Lankan Airlines Company Limited to investors selected through a
transparent procurement process. Accordingly, considering the resolutions furnished by the Minister
of Ports, Shipping and Aviation, the Cabinet of Ministers took the decision to hand over the
responsibility of studying the methodology of restructuring Sri Lankan Airlines Company Limited
and making recommendations to the Cabinet of Ministers to State – owned Enterprises Restructuring
Unit established under the Ministry of Finance, Economic Stabilization and National Policies


3. Draft bill of Rathanathissa Saama Padanama (Rathanathissa Peace Foundation)
(Incorporated)


The draft bill of Rathanathissa Saama Padanama (Rathanathissa Peace Foundation) (Incorporated) in
which Rev. Eriyawe Rathanathissa Thero, Chief Incumbant of Sri Waapikarama, Paalukadawala,
Galgamuwa holds the post of Executive Director, has been submitted to the Parliament as a private
proposal of a member of Parliament by Hon U. K. Sumith Udukumbura, Parliamentarian of
Kurunegala district. In terms of the provisions of the standing order 52 (06) of the Parliament, the
said draft bill has been referred to the Minister of Education by the subject Minister for obtaining a
report on that. Concurrence of the Attorney General has been granted to the bill drafted by the Legal
Draftsman. Accordingly, the approval of the Cabinet of Ministers was granted to for the proposal
furnished by the Minister of Education to submit a report to the Parliament recommending the said
draft bill.

4. Recommendations submitted to the Hon. President by the Finance Commission in relation to
the year 2023.


The recommendations for the financial year 2023 have been submitted to the Hon. President by the
Finance Commission in terms of the provisions of the Constitution of Sri Lanka. Accordingly,
considering the proposals furnished by the Hon. President, the Cabinet of Ministers granted approval
to take appropriate measures to implement the prescribed recommendations forwarded by the
Finance Commission and to submit the said recommendations to the Parliament in terms of Article
154 R (7) of the Constitution.


5. Bill for the Revision of Approved Borrowing Limit for the year 2022


On 17.10.2022, the Cabinet has approved the preparation of a bill to revise the approved borrowing
limit for the year 2022 . Attorney General’s clearance has been received for the bill prepared
accordingly by the Legal Draftsman. As such, the proposal presented by the President hi his
capacity as the Minister of Finance , Economic Stability and National policies to publish the said
Bill in the Government Gazette and thereafter present the same in Parliament, for approval, was
approved by the Cabinet.


6. Submission of the Regulations published in the gazette to Parliament for Approval


The proposal presented by the Hone. President hi his capacity as the Minister of Finance ,
Economic Stability and National policies to present the following regulations published in the
Govt .Gazette in Parliament, for approval, was approved by the Cabinet.
I. 5 Gazette Notifications containing Regulations issued under Sections 2 and 5 of the Special
Commodity Levy Act, No. 48 of 2007.
II. 2 Gazette Notifications containing Regulations issued under Sections 2 of the Revenue
Protection Act No. 19 of 1962
III. 2 Gazette Notifications containing Regulations issued under Sections 14 of the Sri Lanka
Export Development Act. No 40 of 1979.
IV. 2 Gazette Notifications containing Regulations issued under section 3 of the Ports and
Airports Development Levy Act, No. 18 of 2011 : and
V. 01 gazette Notification containing Regulations issued under section 2 (a) of the Value Added
Tax Act No. 06 of 2005

7. Budget Debate Program -2023


The following program proposed for the budget debate related to the financial year 2023 was
presented by the Honorable Prime Minister for the approval of the Council of Ministers. The
program received the consent of the Cabinet of Ministers.

 Budget Speech (Second Reading of the Appropriation Bill): 14.11.2022
 Budget Second Reading Debate: From 15.11.20 to 22.11.2022 (07 days)
 Budget Committee Stage Debate: From 23.11.2022 to 08.12.2022
 Budget Voting : 08.12.2022

8. Restrictions on foreign travels for Ministers, State Ministers, and Government Side MPs on
sitting days of parliament and during the budget debate


The Cabinet of Ministers approved the Prime Ministe's proposal that ministers should not travel
abroad during sitting days of parliament and during the budget debate except in case of urgent
medical needs or very urgent work of the government, except in case of urgent medical needs or
very urgent work of the government.

 

President Ranil Wickremesinghe noted that the government is aiming at an agriculture modernization programme in which tea will have a prominent place. He said that the country has a very competitive tea industry that needs to be developed.
Addressing the 32nd Annual General Meeting of the Sri Lanka Tea Factory Owners Association at the Water’s Edge Hotel in Battaramulla yesterday (30), he said that the main focus should be on producing quality tea be high-grown or mid-grown.
“It is useless for us to try to compete with those who are not having the quality. We have an opportunity. Let’s go for it and develop the industry, modernize our factories, look at renewable energy, the biomass, all that is there,” the President emphasized.
Following is the full speech made by the President;
“I was listening to the report by your president about a survey of the tea industry today. He came out with a tale of woes. That is understandable looking at what we have gone through this year. Now, it is my chance to come out with my tale of woes because I have taken over the titanic after it hit the iceberg. So you can just imagine where I have to start. Everything was down.
We have declared ourselves bankrupt. What have we got to do? First is to ensure that people can live and there is enough food to eat, whatever the other difficulties. With the bankruptcy that we have declared, our economy has virtually come to a halt. The inflation, the bankruptcy, and everything else that is happening have brought our economy to a grinding halt.
How do we restart it? That is what we are engaged in. In addition, I thought I’d explain to you the process. Primarily, we have to conserve whatever foreign exchange we have and limit imports so that we could get fuel, fertilizer and medicine.
It has not worked fully initially, but now it’s working much better. Therefore, that is how we started. Then as the revenue dried up, we faced the difficulty of paying our bills or meeting our commitments. We had to keep two things in mind, one is to pay the salaries of government servants, about 1.7 million people and service our debts. Therefore, we have had to work within this scope.
Now that we have declared ourselves bankrupt, the first issue was to ensure that the world would now accept that we have taken sufficient steps to wipe out the label of bankruptcy, which meant that we have to go to the IMF and discuss with them. Every country and organization wanted us to meet with the IMF and devise a plan.
We did have a plan until 2019 when we cancelled the last year. Therefore, we had to start original discussions with the IMF. We had no other option. Our growth rate this year is going to be -8%. Last year too we recorded minus growth. This year is also -8%, and next year it is forecast that it would be -3%.
However, there’s one other factor which worries me. When that forecast was made, everyone thought the global economy will do well. Now, all the indications are that the global economy will fair badly. How will it impact, because the rising inflation in European and other countries will mean that the cost of living will rise? This in turn can somehow affect exports such as less clothing, maybe less tea, and less coffee. We have to understand that.
Therefore, we have to get through this year and then go into next year. Hence, we have to somehow manage two years. Our revenue reduced from 15% to 8.5% and we are expected to get the revenue back to 15%, which I think we have to do.
The timeframe is 2026. I went in for a four-year program.
I didn’t think we could bear the burden if we tried to do it in two years and it may not have been possible. I’m happy that we went for four years because 2023 looks to be a bad year globally, not only for Sri Lanka.
So we had to first come to an arrangement which meant raising money. To raise that money, we had to tax everything, which also meant agriculture.
As someone once said, if it moves tax it. We had to come to that level and we had no way out. I wish we could have done it gradually but couldn’t because we needed the money. If you look at the taxes, those who paid taxes up to 2019 got a reduction 2019. Therefore, that’s a loss of revenue. Now what we are trying to do is bring it back first to the 2019 level and add a little bit more. So if you look at up to 2019, your taxation then and today is one figure. However, if you look at 2020 the gap seems much bigger. The fact is that we are suffering, it’s not only tax, but our rupee has also depreciated and interest rates have gone up.
Therefore, it is in this context that we have to operate. Ordinary people are finding it very difficult to live. I mean it’s in that condition that we have to come back. So the first issue is to ensure that we can restructure bankruptcy. We have to start talks with our creditors. I first went to the Paris Club where all the creditors were from the West and Japan.
However, we are in a unique position today where out of our three main creditors, only one belongs to the Paris Club. Japan. The other two are not in the Paris Club. They are India and China. I mean China only started dealing with bankruptcy in Zambia. I think India has it for the first time with Sri Lanka. I have already started discussions with Japan and now with India and China. We get down to a common platform of how we can resolve it while we also have discussions on bilateral issues that affect each other’s countries.
Now, this is the process, we had to move. If we can move and come to an agreement by December, which means coming to an agreement by mid-November, and going up to the IMF Board in mid-December, we will gain a big advantage. However, I don’t know whether we can do it for the simple reason that in China, the focus has started now after the party conference. However, we must aim to have it by January.
Therefore, this is what we are aiming at, and it means that we have to show that we have the revenue and we can go ahead. We start from there. Then how do we go ahead to ensure next year is better? In the meantime, we have started receiving assistance from many organizations and countries. Some countries have helped us through different organizations.
So thanks to the World Bank, ADB and others, we are having FAO, and we are having enough fertilizer. Even countries like the US have assisted us. So the fertilizer issue is solved. No one will give us money for fuel. Hence, we have to use the savings on fertilizer with local foreign exchange to buy fuel.
The next issue though, is that the price of fuel has dropped now and everyone expects the price of fuel to increase in December/January due to the Ukraine war and winter. Hence, that’s the next issue that we have to face. But since we have received fertilizer, the first thing was to revive agriculture, starting with Paddy and then getting on to tea and other crops.
Therefore, this is one part where if we get a good Maha crop by March/April next year, that will help to stabilize the economy. Meanwhile, once we get the agreement, the countries will come to help us. However, it takes time to get loans from bilateral loans again. Meanwhile, the World Bank and the ADB are willing to come up with bridging finance and the whole process will start.
Therefore, we have to thirdly go all out to improve our tourism. I think if we can aim for good tourist numbers by December next year as it grows progressively, then it will start working. Finally, we need foreign exchange reserves. There is no way in which you can raise it now. The only way in which we can raise foreign exchange reserves is by selling off some of our enterprises for dollars so that we can at least put $ 3-4 billion into the reserve, strengthening the rupee further. It will make life that much more affordable if you are moving to a complete market economy and a high-growth economy. This is the only step that we can take because so far having a vast state sector did not enable the economy to grow that fast.
I know the problems you have and I know many of you in the tea sector. Factory owners as much as in the rubber, coconut sector construction sector and the hotel sector are having problems with your banks, servicing your loans etc. So that’s why we are hoping first to bring the rate of interest down gradually.
The Governor of the Central Bank has informed us that our inflation is peaking. So by about February or March, we can see the reduction of interest rates, if not earlier. If we take all these measures by mid-year, we’ll be able to give relief on the interest rates. It’s difficult when the rupee has depreciated and the interest rates rise. But you have to remember that in two years we printed Rs 2.5 trillion worth of notes. So it has to run through the system.
There is no shortcut and the only way is by getting production up again. So here it’s a question about how we could help you in the tea industry. We have got the fertilizer. I know there are deficiencies in other areas. One of the main things that I asked is that we pay the fertilizer suppliers. We have decided to pay them, but the money hasn’t gone yet.
I hope that with the new taxes and the collection that is coming in November-December we will be able to pay them off. We also have to pay the contractors. The whole industry has come down. So there’s a long list of people with debts which the government has to honour. So that’s the process. But we want the tea industry to develop. And I must assure you, the honourable minister and the State Minister have been spending a lot of their time looking at how to help you in this circumstance.
Because helping the tea industry helps us bring in foreign exchange and save rubber and additional agriculture production. Next year we have to come through with agriculture production. That is what we have to do as we add the rupee stabilizes. Certainly, people will start sending back the exchange, the foreign employment and the money will come up. But also we can’t run on this economic model anymore.
We have to pay our debts. We have to take some more debt. We are to work completely on an export-oriented economy, and that’s what we are working on. We’ll come back to you, but you have a lot of things to do too. We know you need fertilizer. Most of the major issues are that we need replanting. We are suffering because we have not replanted. As a result, our crop per hectare is coming down. Vietnam is overtaking us. Whoever thought that Vietnam will be growing tea. That’s the position. So we are looking at an agriculture modernization programme in which tea will have a big place.
We have a very competitive tea industry that we have to develop. And I think we have to go for quality tea, whether it be high-grown or mid-grown. It is useless for us to keep competing with those who are not having the quality.
We have an opportunity. Let’s go for it and develop the industry, modernize our factories, and look at renewable energy, biomass, and all that is there. So we need a modern industry and certainly, I think it’s good that you have got Price Waterhouse and Cooper. Because you can utilize their report together with the ADB report on the regional plantation companies. Some of you are doing quite well. Others are a disgrace. So let’s see how we can restructure, how we can get your help and go ahead. I thought I described this to you. I haven’t got the best picture possible, but at least I am trying to take the Titanic off the iceberg and once we do that, we’ll go ahead. Thank you very much for inviting me”.
Plantation Industries Minister Ramesh Pathirana, Chief Executive Officer of A. Baur and Company (Pvt) ltd Rolf Blazer and President of Sri Lanka Tea Factory Owners’ Association Lionel Herath also addressed at the occasion.
State Minister Lohan Rathwatte, UNP leader and Parliamentarian Wajira Abeywardena, Plantation Ministry Secretary B. L. A. J. Amarakeerthi, Sri Lanka Tea Board Chairman Niraj de Mel and office bearers and the members of the Sri Lanka Tea Factory Owners’ Association participated in the event.
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Decisions taken at the meeting of the Cabinet of Ministers held on 25.10.2022

01. Bi-lateral aviation accord between Sri Lanka and the Kingdom of Netherlands

The diplomatic relations between Sri Lanka and the Kingdom of Netherlands were inaugurated
back in 1951 and an aviation accord may lead to initiating direct flights for passengers and
crates between the two countries. It may further develop tourist, education, trade, investment,
agricultural and cultural relations between the two countries. Therefore, the Cabinet of
Ministers granted approval to the resolution furnished by the Minister of Ports, Shipping and
Aviation to sign a bi-lateral aviation agreement based on the particulars agreed at the
discussions held between the two countries.

02. Declaration of the National Supply Chain Day

The entire process of converting raw - materials to end products is called the supply chain
management and it enables to maximize the customer value as well as to formalize the supply
sector activities of an enterprise actively for maximizing consumer value and for achieving
competitive profits within the market. The Institute of Supply and Material Management has
brought into attention the appropriateness of declaring a national supply chain day with the
objective of improving the awareness about the importance of developing the supply chains
among the local enterprises and entrepreneurs. Accordingly, the Cabinet of Ministers granted
approval to the resolution submitted by the Minister of Industries for declaring the 24th October
of each year as the ‘National Supply Chain Day’

03. Providing incentives to emigrated employees who send remittances through legal means.

Approval of the Cabinet of Ministers has been granted by the decision on 08.08.2022 to provide
identified relief with the objective of encouraging the migrant Sri Lankan employees engaged
in overseas employment to send remittances through legal means. Accordingly, the Ministry
of Labour and Foreign Employments has issued the relevant circular in the regard and the
eligible migrant employees are facilitated to import a two – wheel electric vehicle subject to a
maximum of USD 25,000 and a four wheel fully electric vehicle subject to a maximum of
USD 65,000. The concurrence of the Cabinet of Ministers has been granted for the following
steps that have been taken with the objective of further encouraging the foreign exchange
earned by emigrant employees to be further remitted to Sri Lanka:
• Granting approval to import a two - wheel electric vehicle with a CIF value up to 50% from
the foreign exchange value remitted up to either 30.04.2023 or up to the date an application
is submitted for the import of a vehicle.
• Granting approval to import a four – wheel electric vehicle with the CIF value up to 50%
from the foreign exchange value remitted from 01.05.2022 to 31.12.2023 to this country.

04. Amendment of Licensing of Shipping Agents Act No. 10 of 1972.

The tanker operators’ regulations have been issued in the year 2005 subject to the provisions
in sections 8 to 10 of the Licensing of Shipping Agents Act No. 10 of 1972. The judiciary has
decided that the 10th regulation of that act should be revised and the approval of the Cabinet of
Ministers has been granted by the decision dated 04.07.2022 to introduce amendments required
to the Licensing of Shipping Agents Act No. 10 of 1972 including the relevant revisions.
Accordingly, the clearance of the Attorney – General has been granted for the draft bill
prepared by the Legal Draftsman. Therefore, the Cabinet of Ministers granted approval to the
resolution furnished by the Minister of Ports, Shipping and Aviation to publish the draft bill in
the government gazette and submit to the Parliament for the approval thereafter.

05. Amendments to the Code of Criminal Procedures Act (Chapter XXX Post-Mortems )

A committee headed by Prof. Ravindra Fernando was appointed to make recommendations
for suitable amendments to the existing laws, procedures and practices regarding the conduct
of post-mortems. The need for amending the Code of Criminal Procedure Act has been
identified to provide for the application of the recommendations of the said committee. The
Cabinet of Ministers approved the proposal to amend the Code of Criminal Procedures Act,
presented by the Minister of Justice, Prison Affairs and Constitutional Reforms accordingly.

06. The Bill on the Singapore Convention on Mediation

The United Nations Convention on the International Settlement Agreement resulting from
Mediation alias the Singapore Convention on Mediation has been approved by the member
states at the United Nations General Assembly on 20.12.2018. Sri Lanka has signed the said
agreement on 07.08.2019 and domestic laws should be enacted to enforce it in Sri Lanka.
Accordingly, the Cabinet of Ministers approved the proposal presented by the Minister of
Justice, Prison Affairs and Constitutional Reforms to prepare a appropriate bill taking into
account the provisions of the relevant convention.

07. Validity period extension of the loan taken for National Transmission and Distribution
Network Development and Efficiency Improvement Project .

The agreement related to obtaining a loan of 24930 million Japanese Yen from the Japan
International Cooperation Agency for this project was signed on 11.08.2015 and the validity
period of the loan is scheduled to end on 28.10.2022. Due to the prevailing situation in the
country, the project could not be implemented as scheduled and the need of extending the
validity period of the relevant loan has arisen accordingly. As such, the Cabinet of Ministers
approved the proposal presented by the Minister of Power and Energy to extend the validity
period of the respective loan till 28.04.2026.

08. Revision of rooftop solar tariff rates

At present, about 580 megawatts have been added to the national grid through the system of
solar power plants installed on roofs. According to the long-term Generation Expansion
Plan prepared by the Electricity Board, it has identified the need to obtain another 1800 MW
of electrical capacity through this. A committee has been appointed to revise the electricity
purchase rates from approved solar power plants as an incentive. Accordingly the Cabinet of
Ministers approved the proposal presented by the Minister of Power and Energy to revise the
rates in accordance with the recommendation of the said Committee.

 •The country lost Rs. 700 billion due to wrong economic policies in the past
• The inflation rate increased to 70 per cent since Rs. 2,300 billion was printed during the past two and a half years.
• The country will have to revert to an era of queues if revenue is not raised through direct tax increases.

The Government is ready to implement prudent economic management after successful debt restructuring, emphasized President Ranil Wickremesinghe, when he delivered a special statement on tax policy today (19).

President Wickremesinghe further noted that it was not possible to strengthen the economy without increasing the revenue of the country, which will compel him to reluctantly make tough decisions in order to rebuild the nation.

The full statement by President Ranil Wickremesinghe is as follows;

An important step in Sri Lanka’s debt restructuring program took place last week. A team under the Minister of State for Finance participated in the Annual (October 07) meeting of the International Monetary Fund (IMF). In that instance, a meeting was convened by the IMF, with the lending and international private institutions to Sri Lanka.

Over 75 persons participated both in person and through zoom technology. The main objective of this meeting was for the three main countries that have granted loans to Sri Lanka, namely Japan, China and India, to come together on a common platform to discuss the future steps in the formulation of concessions.

During this meeting, the IMF and Sri Lanka pointed out the need for a common platform. India and China have informed that they will examine the issues further and respond accordingly. These two countries have also informed the possible need for bilateral discussions in this regard.

Many other countries also participated in this meeting, including the attendance of an Assistant Secretary of the United States Treasury. All this was possible due to the implementation of the decisions taken in consultation with the IMF.

There is an aspect about the income of the Government of Sri Lanka which need to be noted. In 2015, during a visit to Sri Lanka the IMF representatives underlined the need or a surplus in the primary budget. Therefore, it was provided for in 2017-2018. However, it was reduced in 2019 due to the Easter Sunday bombings. However, there were no serious repercussions. The IMF was optimistic that Sri Lanka would be able to increase its revenue, since there was a surplus in the primary budget.

At that juncture, Sri Lanka’s income was between 14.5% – 15% of the Gross Domestic Product (GDP). However, it was agreed that Sri Lanka could gradually increase this to 17%-18%.

However, in November 2019, the country’s taxes were drastically reduced, with the Government revenue decreasing to 8.5%. In this context, the IMF set aside the agreements and declared that it was unable to provide the agreed assistance.

That year the Government lost approximately Rs. 600-700 billion as revenue. Simultaneously, the country had to face the Covid-19 pandemic. These issues are the main factors that led to the collapse of Sri Lanka’s economy.

The IMF advised the need for a surplus in Sri Lanka’s primary budget. It was agreed to, since the country needs the support of the IMF.

It was also decided to increase the country’s income from 8.5% to 14.5% of the GDP. However, it is a difficult task to accomplish immediately, it is envisaged to achieve this by 2026.

Initially, a decision had to be taken on the manner in which the income is to be increased. Money was printed due to the decrease in income. During the past two years, Rs. 2300 billion has been printed, resulting in inflation rising to 70% – 75% and even more in respect of food inflation.

These increases need to be controlled, while securing income. Therefore, during the discussions with the IMF a new tax system has been proposed. The IMF informed that even the export industries would be required to pay taxes.

The IMF pointed out that in countries with an export economy, the related industries were liable for tax. The IMF also upheld that Sri Lanka’s primary export economy is based on the plantation industry. During British rule, taxes were charged from every plantation sector, including tea, coconut and rubber. Therefore, if the country has to move towards that goal, taxes will have to be paid. The export sector has now questioned this aspect and the related concerns are to be submitted to the IMF.

The second issue regarding the personal tax structure. The majority of tax revenue is through indirect taxation. The majority of the country’s citizens, even those below the poverty line, had no choice but to pay indirect taxes. The direct tax revenue is 20% and 80% has been derived from indirect taxes.
The IMF that particularly had reservations in this regard were of the view that the amount of tax obtained through direct taxes should exceed 20%. The IMF noted that otherwise this would not be successful and ordinary citizens would need to pay taxes.

Therefore, according to this framework, and also to achieve the goals of 2026, the Treasury and the IMF discussed the possibility of limiting the taxation from those who have an income of Rs. 200,000, which however, did not materialize. Eventually, this has resulted in the decision to levy income tax on people earning over 100,000. Today, this has become a vital concern amongst the citizens.

Against this backdrop, without this tax system, the desired goal will not be achieved. The agreed goal is to achieve 14.5% – 15% of Gross Domestic Product (GDP) revenue by 2026.

If Sri Lanka withdraws from this program, IMF assistance will not be received. Without IMF certification, the support of these international financial institutions such as the World Bank, Asian Development Bank, and the countries that have supported financially will not be forthcoming. If that happens, the country will be back to the era of queues.

Tougher times ahead will have to be faced. Therefore, these loans need to be obtained and embark on a debt-restructuring program. These decisions are not being taken wilfully, but are being done reluctantly. However, these decisions will be reconsidered periodically.

In the same manner of conducting the debt restructuring program successfully, if a bountiful Maha season is achieved as expected, it will help in reducing economic pressure. Measures to increase the country’s foreign reserves has also been discussed and once all these steps have been implemented the country can move forward.

The country at this juncture is facing a difficult period. Expectedly tough decisions have to be taken during these difficult times. I undertook this challenge when no one else was willing to come forward. Therefore, it is my responsibility to explain the background of the related issues and the Government is also ready to discuss this further if required.

President Ranil Wickremesinghe has issued instructions for the final rites of the late Anuradhapura Atamasthanadhipathi, North Central Province Chief Sanghanayaka Most Venerable Dr Pallegama Sirinivasa Thera, to be held under full state sponsorship.

Accordingly, President Ranil Wickremesinghe has appointed a committee comprising the Governor of the North Central Province Maheepala Herath and Minister of Buddhasasana, Religious and Cultural Affairs Vidura Wickramanayaka to coordinate the state funeral of Venerable (Dr) Pallegama Siriniwasa Thera, Custodian and Chief Priest of the Maha Bodhi and Atamasthana Adhipathi of Anuradhapura.

Most Venerable Pallegama Sirinivasa Thera, who played a leading role among the Maha Sangha of this country, spent his monastic life meaningfully, constantly dedicating himself to the welfare of the people of Rajarata as well as the whole country.

President Media Division (PMD)

 

President Ranil Wickremesinghe has issued instructions for the final rites of the late Anuradhapura Atamasthanadhipathi, North Central Province Chief Sanghanayaka Most Venerable Dr. Pallegama Sirinivasa Thera, to be held under full state sponsorship.
Accordingly, President Ranil Wickremesinghe has appointed a committee comprising the Governor of the North Central Province Maheepala Herath, and Minister of Buddhasasana, Religious and Cultural Affairs Vidura Wickramanayaka to coordinate the state funeral of Venerable (Dr) Pallegama Siriniwasa Thera, Custodian and Chief Priest of the Maha Bodhi and Atamasthana Adhipathi of Anuradhapura.
Most Venerable Pallegama Sirinivasa Thera, who played a leading role among the Maha Sangha of this country, spent his monastic life meaningfully, constantly dedicating himself to the welfare of the people of Rajarata as well as the whole country.

Assistant Secretary of State for South and Central Asian Affairs Donald Lu who is currently on an official visit to Sri Lanka met with President Ranil Wickremesinghe and assured to support Sri Lanka during this difficult period.

While appreciating the President’s efforts in rebuilding Sri Lanka’s economy he said that President Ranil Wickremesinghe is the right person to get the country out of the present crisis & assured him that he has a force backing him.

He also stated that the U.S. government would continue to assist Sri Lanka with their negotiations with the IMF and the debt restructuring talks.

These remarks were made during the discussion that took place this evening (19) at the Presidential Secretariat in Colombo.

During the discussion President Wickremesinghe also expressed his appreciation to the US Government for their continuous support towards Sri Lanka.

The Assistant Secretary further stated that the US government is expected to provide all possible support to Sri Lanka and its people in this difficult period and welcomed the President’s efforts in regard to reconciliation and strengthening of the Democratic institutions.

The US Ambassador to t Sri Lanka Julie Chung and Political and Economic Advisor Susan Walke were also present at this discussion.

Decisions of the Cabinet of Ministers taken at their meeting held on 17.10.2022


01. State Asset Management Bill


During the budget speech delivered by the Hon. President for amending the appropriation
bill for the financial year 2022, it was suggested to introduce several new acts with the
the objective of strengthening the economy, enhancing the efficiency of the government
service as well as product management of government-owned resources and the
requirement of revising provisions of several existing acts. Accordingly, the Cabinet of
Ministers approved the proposal furnished by the Hon. President as the Minister of
Finance, Economic Stabilization, and National Policies instruct the Legal Draftsman to
draft a bill in order to introduce a new act for the management of public assets including
appropriate provisions so that provisions will be available to expand the duties of the
Comptroller General Office which is under the purview of the General Treasury and to
provide legitimacy to it as well as prepare a national assets register and introduce a
central database related to state assets.


02. Revision of the Ayurveda Act (Indigenous Medicine Act)


The Ayurveda Act No. 31 of 1961 has been amended from time to time on several
occasions previously and it has been recognized that the act required to be amended further
to cater to the requirements of the day so that sustainable development goals can be
achieved. Accordingly, the Cabinet of Ministers granted approval for the proposal
furnished by the Minister of Health to amend the Ayurvedha act including appropriate
provisions for expanding services of the Department of Ayurveda for the upliftment of the
indigenous medicine sector and activities such as the establishment of Osu Uyna (medicinal
gardens) for research purposes.


03. The Recovery of Possession of the Premises Given on Lease (Special Provisions) Act.


The Cabinet of Ministers gave approval on 27.09.2021 to the draft bill to enact a new
law in place of Recovery of Possession of the Premises Given on Lease (Special
Provisions) Act. The Attorney general’s clearance has been received for the bill prepared
accordingly by the legal draftsman. The Cabinet of Ministers approved the proposal
presented by the Minister of Justice, Prison Affairs and Constitutional Reforms to publish
the bill in the Govt. gazette and to table it in parliament for approval consequently.


04. Establishment of the National People’s Council Secretariat for the formation of the
People’s Council to strengthen participatory democracy.


It has been revealed that due to the gap between the center of governance and the people
of the periphery, the representative democratic structures that have been operating in Sri
Lanka does not pay due attention to public opinion sufficiently in the policy and
the decision-making process and since the people's real issues are not adequately addressed,
social criticism is arising in this regard. Based on this, it has also been seen that opinions
and objections against representative democracy are emerging in society. Under that
the situation, the need for a strong mechanism where public officials and the public can discuss
rural issues together, determine development priorities and rural people can participate in
the decision-making process in an organizational structure where participatory democracy
is practiced at the rural level has emerged. It will be possible to effectively and efficiently
prevent public oppression that may occur due to bureaucracy and arbitrary politicization
through an organized mechanism that actively finds public opinions for public policy
formulation and implement those policies with community participation. The National
Movement for a Just Society has accordingly presented a concept paper on " People’s
Council System" with an independent institutional structure where public participation can
be ensured for the formulation of public policies and the successful implementation of
those policies. The concept paper also proposed the establishment of the “National People's
Council and "Village People’s Councils " to cover every Grama Niladhari Division in the
Island. Accordingly, the Cabinet of Ministers approved the proposal presented by the Hon.
President to accept the proposed People’s Council system as a fundamental policy and
to establish the "National People’s Council Secretariat" as the national-level independent
central institution for establishing the People’s Councils system.


05. Establishment of Cabinet Sub-Committee on Reconciliation.


The Cabinet of Ministers approved the proposal presented by the Hon. President to
establish the Cabinet Sub-Committee on Reconciliation chaired by the President and
consisting of the following members in order to promote reconciliation between the various
sections of the population in Sri Lanka and to propose solutions to the problems faced by
the people regarding resettlement, land, and missing persons after the conflict in the North
East
• Hon. Dinesh Gunawardena – Prime Minister
• Hon. Douglas Dewananda – Minister of Fisheries
• Hon. Dr. Wijayadasa Rajapaksha – Minister of Justice, Prison Affairs and
Constitutional Reforms
• Hon. Ali Sabry – Minister of Foreign Affairs

 

Decisions taken at the meeting of the Cabinet of Ministers held on the 10.10.2022


01. Allocation of plots of lands for the establishment of industries from regional industrial zones
where that infrastructure facilities have been developed.


The Cabinet of Ministers approved the proposal furnished by the Minister of Industries to allocate
16 plots of land under long – term lease basis for 35 years for 16 investors recognized under the
regional industrial zone development programme as recommended by the project evaluation
committee in operation under the Regional Industrial Services Committees that has been established
as per the provisions of the Industries Promotion Act No. 46 of 1990 and the Ministry of Industries.


02. Making of one - time Payment for the welfare of the families of missing persons


Based on the certificate of missing issued by the Registrar General for the families of the missing
persons, it was decided at the meeting of the Cabinet of Ministers held on 14.03.2022 to pay a sum
of rupees 100,000/- to the closest relative of the missing person. However, due to taking a long time
to obtain the certificate of missing, as well as the amount of rupees 100,000/- not being sufficient,
the Cabinet of Ministers approved the resolution submitted by the Minister of Justice, Prisons Affairs
and Constitutional Reforms to ignore the requirement of obtaining the certificate of missing if the
compensation secretariat has confirmed that the relevant person is missing and to pay an increased
amount of rupees 200,000/- as compensation.


03. Provision of a plot of land belonging to the Urban Development Authority on long – term lease
in order to implement a rest house development project.


A proposal has been submitted to provide the land at No. 09, Kareithivu Road, Jaffna which belongs
to the Urban Development Authority to Grand Mountain Hotel Co. on a lease for 30 years with a
view to implement a rest house development project. Accordingly, the Cabinet of Ministers approved
the proposal submitted by the Minister of Urban Development and Housing for providing the said
land to Grand Mountain Hotel Pvt. Ltd. on a lease for 30 years with a view to implement a rest house
development project subject to relevant conditions.


04. Submission of regulations issued under the Import and Export (Control) Act No. 1 of 1969 for
the approval of the Parliament.


Import and Export (Control) Regulations No. 15 of 2002 relevant to the import of goods under open
accounting system as well as the Import and Export (Control) Regulations No. 16 of 2002 with a
view to encouraging financial remittances performed by Sri Lankans serving overseas countries have
been imposed. Accordingly, the import export regulations No. 15 of 2002 imposed for empowering
imports under the payment systems of open accounts / payment of money after sale of goods basis
in relation to import of essential fool items including milk powder and red legumes / dhal and poultry
food products has been published in the Extraordinary Gazette notification No. 2297 / 79 dated
16.09.2022. Further to that, the import export regulations No. 16 of 2022 imposed for enabling the
Sri Lankans employed overseas to import totaly electric vehicles as a method of encouraging them
has been published in the Extraordinary Gazette notification No. 2298/55 of 23.09.2022.
Accordingly, the Cabinet of Ministers granted approval to the resolution furnished by the Hon.
President as the Minister of Finance, Economic Stabilization and National Policies to submit the
aforementioned import and export regulations to the Parliament for its concurrence.


05. Amendments to Civil Procedure Code (Statute 101) (Section 205)


Approval of the Cabinet of Ministers was granted at their meeting held on 18.01.2022 for drafting a
bill to amend the Civil Procedure Code (Statute 101) (Section 205) which is applicable to provision
of certified copies of decree nisi or decree absolute to the parties of a court case. Accordingly,
clearance of the Attorney General has been granted for the draft bill which has been prepared by the
Legal Draftsman. Therefore, the approval of the Cabinet of Ministers was granted to the proposal of
the Minister of Justice, Prisons Affairs and Constitutional Reforms to publish the said draft bill in
the government gazette notification and thereby to table it in the Parliament.


06. Introducing a new Legal Deposit Act in place of former Legal Deposit Law.


The National Archives Department is responsible for the systematic management and preservation
of evidentiary documents and private documents of public authorities that reflect the written history
and cultural identity of Sri Lanka. The department implements 3 Acts namely Newspaper Ordinance
No. 5 of 1839, Printers and Publishers Ordinance No. 1 of 1885 and Press Ordinance No. 16 of 1902
in relation to the legal deposit of such printed publications. Accordingly, the legal copies of the
relevant documents are kept in the custody of the National Archives Department. Accordingly, the
legal copies of the relevant documents are in the custody of the department of national archives. Out
of 131 countries in the world, the law in effect in Sri Lanka is the oldest deposit law. The need to
amend the said law to suit the current needs has been recognized. A committee of relevant subject
experts has prepared a preliminary draft for this purpose based on the opinions of the relevant parties
from the year 2018. Accordingly the Cabinet of Ministers approved the proposal presented by the
minister of Buddhasasana, Religious and Cultural Affairs to advise the legal draftsman to prepare
bill to introduce a new Legal Deposit Act to Sri Lanka based on the said preliminary draft.


07. Purchase of 80 Ton Bollard Pull Twin Azimuth Stern Drive Harbour Tug Vessel for Port
Authority


Currently, there are 7 tugboats that are functioning well in the port of Colombo. It has been identified
that one more tug vessel of 80 ton capacity should be procured for future operations. The Cabinet of
Ministers approved the proposal presented by the Minister of Ports, Shipping and Aviation to take
necessary steps for procurement of tug vessel following international competitive bidding process.


08. Awarding the Contract for Automated Crew Scheduling and Resource Management System
for Sri Lankan Airlines.


Commercial airlines around the world operate Automated Crew Scheduling and Resource
Management Systems. The contract period of the current system of SriLankan Airlines will end on
31.10.2022. Therefore, the international competitive bidding system is being adopted to procure a
suitable service provider. Accordingly, the Cabinet of Ministers approved the proposal presented by
the Minister of Ports Shipping and Aviation to award the relevant procurement to CAE Flight
Services USA, Inc. company for a period of 5 years as recommended by the Cabinet appointed
Standing Procurement committee.


09. Awarding the construction contract of National College of Education of Technology to be built
in Narangalla, Kuliyapitiya with Korean aid and local funds


The Cabinet of Ministers has granted approval on 18.01.2017 for the construction of a National
College of Education of Technology in Narangalla, Kuliyapitiya with the aid of Korean government
and the local funds. Until the end of November 2021, it has not been possible to commence the
construction work assigned to the Korean International Cooperation Agency due to various
reasons. Korean International Cooperation Agency has agreed to assign these construction works
to Central Engineering Consultancy Bureau as a direct contract. The Cabinet of Ministers approved
the proposal presented by the Minister of Education to assign this contract to the Central
Engineering Consultancy Bureau accordingly


10. Road Reconstruction Project, Suriyakanda- Rakwana (A017) section of Deniyaya-Madampe
road in Galle


A loan agreement has been entered into with the OPEC Fund for International Development for the
reconstruction of the road section Suriyakanda- Rakwana (A017) of Deniyaya-Madampe road in
Galle. The renovation work of that road section is planned to be done under 3 contract packages
and out of these 2 packages are under the authority of the Ministry Procurement Committee. The
other package is under the authority of the Cabinet of Ministers. Accordingly the cabinet of ministers
approved the proposal presented by the minister of Transport and Highways to award the contract
package under the cabinet authority to K.D.A.Weerasinghe & Pvt. Ltd. upon the recommendation
of cabinet appointed standing procurement committee.


11. Enhancement of substitution allowance paid on maternity leave for female sub postmasters.


According to the Sri Lanka Sub-Postmaster Service Constitution, a Sub-Postmaster is entitled to
maternity leave subject to employing a substitute at her own expense. It seems that many maternity
Sub-Postmasters limit their maternity leave to only 30 days as they have to hire a substitute at their
own expense for this period. Medical recommendation is that a child should be breastfed for at least
6 months. The recommendation of the World Health Organization is the same. Accordingly the
Cabinet of Ministers approved the proposal presented by the minister of mass media to pay an
allowance of 84 days instead of the present allowance of 30 days to female Post Masters.

 

The birthday of the Prophet Muhammad who is venerated by the Sri Lankan Muslims as well as the Muslim brethren around the world is celebrated today (09).
It is my belief that doctrine of Prophet Muhammad as the religious leader of the Islamic devotees around the world will help to alleviate the situation in the society today more than ever before.
To live with the qualities that Prophet Muhammad preached and deal with others with a sense of understanding is a tribute to him rather than attempting to overcome them.
The coming of the Prophet Muhammad and his vision signified the protection of the entire human community as well as their respect. By molding one’s life in accordance with the teaching of Prophet Muhammad, one can achieve success not only spiritually but also socially.
I wish that the birthday of Prophet Muhammad who was also called Al-Amin or ‘the trusted one’ will lead to spiritual and social progress and peace of all the nations including the Sri Lankan Muslims and Muslim brethren around the world.
Ranil Wickremesinghe

Page 14 of 97

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