The final vote in Parliament on Budget 2024 is scheduled for 13 December evening after 19 days of debate at Committee Stage. It was endorsed with a majority vote of 45 with 122 voting for the Budget at its second reading. How many of these 224 MPs leaving out the Speaker has ever questioned the legality of the Budget?
To date, none in Parliament, including the JVP that vows to establish a clean and corruption free economy and claims it is they alone who could clean this nauseatingly corrupt and bankrupt economy to establish a vibrant economy, has ever questioned how this Government could present a Budget violating the Fiscal Management (Responsibility) Act, No. 3 of 2003. (https://www.srilankalaw.lk/YearWisePdf/2003/FISCAL_MANAGEMENT_(RESPONSIBILITY)_ACT,_No._3_OF_2003.pdf) Section 03(a) of this Act very clearly states, “reduction of government debt to prudent levels, by ensuring that the budget deficit at the end of the year 2006, shall not exceed five per centum of the estimated gross domestic product and to ensure that such levels be maintained thereafter.”
Budget 2024 in violation of Fiscal Management Responsibility Act
It is the responsibility of Parliament to oppose a Budget wholesale if and when a Government presents one in Parliament which exceeds the deficit limit of 5%, violating Section 03 of the Fiscal Management Responsibility Act (FMRA). Or demand the Government amend its income and expenditure proposals pragmatically and prudently to fall in line with sub-section 03(c) which states, “adoption of policies relating to spending which do not increase government debt to excessive levels” that according to this Act is 5% the most and also sub-section 3(d) that states, “adoption of policies relating to spending and taxing, as are consistent with a reasonable degree of stability and predictability in the level of tax rates in the future.” They provide legal guidelines for budgeting by a government.
Totally ignoring the FMRA this Parliament voted on the second reading of the 2024 Budget presented by President Wickremesinghe as Finance Minister that estimates a deficit of 9.1% that is over 4% above the maximum 5% in law. They continue debating the same illegal Budget at Committee Stage and would vote on 13 December possibly approving it despite the 9.1% deficit estimated.
This Parliament elected to office in August 2020 has always been voting on illegal Budgets. It voted on the 2021 Budget with a deficit of 12.2% and the 2022 Budget with a deficit of 10.2%. The 2023 Budget estimated a deficit of 7.9%, revised in August to be 8.5%. The 2024 Budget with a deficit of 9.1% is the fourth illegal Budget that this Parliament would deliberate upon and vote on.
Apart from the budget deficit the FMRA has another restriction on State liabilities that every Parliament including this, kept circumventing with amendments adopted. Sub-section 3(f) initially laid down that “….at the end of the financial year commencing on January 1, 2013, the total liabilities of the Government (including external debt at the current exchange rates) do not exceed sixty per centum of the estimated gross domestic products for that financial year.” To avoid this restriction, both Rajapaksa and Wickremesinghe Governments amended the Act in 2013, 2016 and 2021 June, to raise the limits higher and compliances delayed. Now the 60% limit on total government liabilities is 80 p% and compliance time limit has been pushed to 2030 from 2020.
Transparency and accountability of governance
The FMRA No.03 of 2003 is not merely about laying down restrictions, and limits on fiscal management. It is also about demanding transparency, accountability and public awareness on public finance management. Sub-section 4(2) of this Act lays down that the Finance Minister should, “…. every year on the day fixed for the second reading of the Appropriation Bill in Parliament, cause the Statement of the Government to be released to the public and to also be laid before Parliament.” The “Statement of the Government” is the “fiscal strategy of the Government (that) shall be set out in a Fiscal Strategy Statement” (Sub-section 4.1)
Reason to have a “Statement” the Act says is to “…. increase public awareness of the Government’s fiscal policy and to establish standards for evaluating the Government’s conduct of its Fiscal strategy.” (Section 5) The Act under Section 5 provides for what the contents of this Statement should be. It also calls for a “Budget Economic and Fiscal Position Report” to be tabled in Parliament.
Most importantly, the Act calls for a Mid-year Fiscal Position Report from the government; the Minister “shall cause to be released to the public” every year “06 months from the date of passing the Appropriation Bill.” (Section 10.1) It says the objective is to “enable the public to evaluate the Government’s fiscal performance as against the fiscal strategy as set out in its current Statement.” (Section 11)
Well, I could go on quoting positive and constructive provisions in this Act aimed at holding a Government responsible to the People through Parliament though the Parliament has repeatedly amended the Act to circumvent on its responsibility towards the people. These “Fiscal Strategy Statements, Budget Economic and Fiscal Position Reports and Mid-year Fiscal Position Reports” required to be placed in the public domain are all provisions that expand democratic space with a focus on people’s engagement in monitoring the Government’s performance. They are therefore about transparency and accountability of governance.
We are well aware, no Opposition in all post 2006 Parliaments, ever paid any attention to the FMRA regarding budget deficits and government liabilities. No Opposition party had ever protested saying they would boycott Parliament if the FMRA is not adhered to. Even the TNA leadership that on occasions raised objections to a heavily increased defence budget after the conclusion of the war, had ever said the Budget exceeding the 5% deficit limit is illegal and should be withdrawn.
Having allowed governments to abscond from their responsibility on transparency and accountability, all Opposition parties silently conniving on violating the FMRA have denied the public the right to engage in discussing Fiscal Strategy Statements, and Mid-year Fiscal Position Reports of governments. It is therefore, not at all surprising we are in a boiling cauldron of an economic tragedy having allowed illegal budgets without any public questioning for well over a decade and a half.
Does it mean, the conscious and concerned public should demand a parliamentary election to change course? Elections are no part of a functional democracy in Sri Lanka or for that matter in any part of South Asia. Elections in this devalued democracy are only procedural. Governments have been changed before on a protest vote to get rid of the incumbent rule and that has nothing to do with electing a government capable of developing the country. Changing governments have not changed this political culture to allow governments and Opposition parties to be held accountable to people. No political party has ever engaged in social dialogue for socio-economic development while in Opposition, to prove they have a program for national development, if voted to power.
All political parties hang their political future on elections with petty issues the ordinary voter is after. This is quite evident in how political parties finalise district nominations. In all districts in both North and South, all mainstream political parties cater to “caste affiliations” and ethno-religious presence in the district. Sadly, that is a criterion for the “preference vote” even among the Sinhala and Tamil urban middleclass professionals. This Sri Lankan voter is not going to be any different at the next elections. Therefore, claims for efficient and clean governments are mere slogans. We do not have any political party with democratic traditions. Nor do we have a political party that had not been in a post 1994 Government and have not been responsible in electing governments they now denounce as corrupt and inefficient.
Where do we therefore begin in cleaning up this corrupt and primitive political culture? My proposition is that those who still wish to have a decent and a civilised parliament elected, should immediately challenge this present Parliament for their neglect in enforcing the provisions of the FMRA; should hold all 225 MPs responsible for denying the public the right to engage in fiscal management of the government as provided for by the FMRA and for participating in adopting an illegal Appropriation Bill for 2024. They should declare that all in this Parliament who vote on the 2024 Appropriation Bill without demanding the Finance Minister to adhere to the FMRA sub-section 3(a) and to present the Government’s Fiscal Strategy Statement in detail according to sub-section 4(1), would be named and shamed for corruption and fraud, and sued in Courts for violating the rights of the voter in engaging in fiscal management as provided for in the FMRA. That as a social campaign would provide for a new beginning in changing social perceptions in creating a more conscious and a responsible voter.
– Kusal Perera
Backlash builds against Sri Lanka’s $3 Billion clean energy push
Utility scale wind, solar and battery projects draw CEB’s ire as they march to take away their vested interests.
The government has ignited a green energy investment spree that’s expected to reach as high as $ 3 billion over the next 3 years. The road to bringing this money in the economy, though, is increasingly hitting speed bumps from the likes of the so called ‘mafia’ CEB officials.
Country’s ambitious vision aims to make the nation’s electric grid greener with 70% of the electricity demand to be met through renewable energy by 2030.
Companies have already announced plans for committing $25 billion investment up to 2030 in the renewable energy sector in the Country, according to the Board of Investment.
With potential Private investments over the next 3-4 years through FDI could include $3 billion in utility scale wind, solar and battery storage projects – Sun Power leading with $1.5 billion, followed by Adani Green with $900 million, by Orbital energy with $200 million, by WindForce PLC with $150 million and balance by a consortium of private developers. However, the opposition to projects has mounted for myriad reasons.
Increasingly, the few so called ‘mafia’ CEB officials, who have strangled the Country’s power sector by delaying the approval process, seems to be more concerned that the rapidly expanding utility scale size of wind, solar and battery projects will irreparably alter their powers and thus their vested interests in earning a share out of the pie.
Despite this backlash, many projects will eventually get built, say developers and analysts, but they could take longer and cost more than expected.
At the government level, there is ample support for speeding up the implementation of the projects, but its only CEB who is pushing back on their own self-motivated agenda, not know at large.
– Harendra Kuruppu
Personal agenda of CEB officials delaying renewable energy projects
The central government & their policies are responsible for most of the hardships we face today. But when it comes to implementing investments and projects in the renewable energy sector, surprisingly the central government has good policies and intent but have failed to implement them due to bureaucracy, corruption and personal agenda of few CEB officials.
The present problem is having too much capacity in the wrong types of power plants and too little in the right types. It’s an open secret that few of the CEB officials are not fond of utility scale renewable energy. They like non-renewable sources of energy but hate utility scale wind, solar and battery storage projects.
Despite renewable energy being clean and cheap, the utility scale RE projects have not been implemented in Sri Lanka on a large scale. Sri Lanka still has plenty of room for Solar and Wind. We only have around 12% of RE in the grid (excluding hydro). We are far from the critical limit that could possibly considerably impact the grid from the fluctuating nature of renewable sources.
CEB wants to convince people that the unreliable nature of RE is the reason why they oppose it. But the real reason is, they can’t maintain their infamous mafia power and pursue their personal agenda when there is an abundance of RE power in the system. The proposal of RE investors won’t get accepted even though the offered rate was lower.
While purchasing non-renewable energy power at a rate of over Rs.45 per unit, the CEB is blocking over 1,500 MW of new utility scale solar, wind and battery storage projects. Had these projects been approved by CEB and put to built in this year, they would be ready to supply electricity at the Rs.24 to 30 per kWh tariff within one and a half years’ time period, with lower than prevailing solar and wind energy tariffs and also far less than the cost of non-renewable electricity.
Few CEB Engineers suddenly come to realize that if the trend of implementing such utility scale re-projects continues in the country, this is going to be a threat to their business and their vested interests.
So, they have resorted to delaying tactics in the approval process of utility scale RE projects not favorable to them, effectively blocking large scale investments and investors who have plans to invest in the country.
On analysis, with the delay in these 1500 MW RE projects, the country will lose annually ~3200 GWh of clean and cheap energy resulting in the country’s economy spending additional Rs. 20 billion per year on account of the higher cost of non- renewable electricity.
It’s hard to fathom the unbelievable level of bureaucracy, corruption & personal agenda of CEB.
– Harendra Kuruppu
Why you may not get Kashmir’s famed apples easily
On a chilly and foggy winter day, hundreds of apple farmers in Pulwama district of Indian-administered Kashmir stored their harvest in a temporary tin shelter installed at the fruit market, anticipating the arrival of traders who would purchase their produce.
The farmers were anxious as the quality of apples this year had not been the best and would affect the price they’d get.
Kashmir is known in India for its variety of apples. But a series of challenges – from the onslaught of fungal scab, the impact of climate change, and a range of economic hurdles – has thrown the flourishing industry into a state of crisis.
Apples are classified into A, B and C categories based on their size, colour and quality. A is the premium category while B and C are those infected with scab (venturia inaequalis) - B being less infected than C.
“Around 40% of the apple production [this year] has been C-grade,” says Ghulam Nabi Mir, an orchardist from Pulwama.
The horticulture department of Jammu and Kashmir says apple, walnut and almond farming provide direct and indirect employment to about 2.3 million people in the region.
Exports from the Himalayan region’s orchards amount to over two million tonnes annually, generating approximately 120bn rupees ($1.44 bn, £1.14bn) in revenue – which is almost twice as much as the region’s tourism sector, Ejaz Ayoub, an independent Srinagar-based economist, told the BBC.
But unusual weather patterns are beginning to take a toll.
“Unseasonal rainfall in April-May led to scab affecting the crop,” says Abdula Gaffar Qazi, 50. ”Even when some farmers sprayed pesticides, the rain washed it away.”
Extreme weather patterns impact the size, quality and quantity of the crop, says Dr Tariq Rasool Rather, a senior scientist at Sher-e-Kashmir University of Agricultural Sciences.
Depending on whether scab affects the crop during the summer or spring season, apple quality can decline to a B or C grade.
Ghulam Mohammad Bhat, 58, a farmer from the Chadoora area of Kashmir’s Budgam district, says he has never witnessed such unusual weather patterns in the region before.
“Hailstorm in May damaged my crop,” he says, adding that a prolonged dry spell in August and September caused water scarcity, leading to diminished colour in the apples.
Mr Bhat’s apple orchard is spread over five acres but more than half of the trees are infected with scab.
Data from Jammu and Kashmir’s meteorology department shows the frequency of severe weather occurrences in the ecologically sensitive Kashmir Valley has increased over the past seven years.
Over 550 people have been killed in extreme weather events in Jammu and Kashmir between 2010 and 2022, it says.
On 18 July 2021, Kashmir witnessed the hottest July in eight years with a record temperature of 35C (95F). Earlier that year in January, the valley had also recorded the coldest night in 30 years.
According to Faizan Arif Keng, an independent weather forecaster in Kashmir, the region witnessed dry weather with temperatures approximately 12C above normal from March to mid-April this year, resulting in early flowering of apple crops. But the weather then changed abruptly and temperatures remained below normal until June.
“This ‘false spring’ damaged the crop,” he says.
Extreme weather makes crop transportation also a major challenge for farmers.
Harvest starts in autumn season. But the valley remains cut off from the rest of the world in winters because of the landslides on the treacherous Srinagar-Jammu national highway, the only road that connects the region to the other states of the country.
It’s common to see hundreds of trucks carrying apples stranded for days if landslides block the highway.
Vijay Taira, vice-president of the Kashmir Apple Merchants Association in the Azadpur fruit market in Delhi, says there’s been an influx of Iranian apples in India’s fruit markets.
This, growers say, affects the Kashmiri apple’s market share and its price
“Only two weeks ago, a box of Kashmiri apples would sell at 1,000-1,300 rupees in India’s fruit markets,” says Ahmad Bashir, president of the Kashmir Valley Fruit Growers Cum Dealer Union (KVFG). ”Now, it is being sold at 800 rupees a box, which does not even cover the cost of production.”
The Indian government’s decision to waive off a 20% tariff on apples imported from the United States has also left farmers in distress over drop in prices, he says.
Extreme weather patterns impact the size, quality and quantity of the crop, a senior scientist says
In November, KVFG wrote to Prime Minister Narendra Modi, seeking his intervention in resolving the crisis.
The region’s horticulture department says these issues can only be resolved at the federal level.
“We have raised these concerns with the government,” says Manzoor Ahmad Mir, deputy director of the department. “Only they can take a call [on it].”
Kashmiri apple farmers also worry the government is not cracking down on dealers selling spurious or sub-standard pesticides.
“If the pesticides were of reliable quality, the scab in our orchards would be less,” Mr Bhat says.
Shafiqa Khalid, also a deputy director at the region’s horticulture department, says strong action has been taken against accused dealers and criminal cases have been filed against them.
Problems arise when farmers don’t heed advisories regarding pesticide spray schedule, she says.
When apple farmers don’t make good income, the “consumption which drives the domestic economy” is directly impacted, Mr Ayoub, the economist, explains.
“The money flows in the market and reaches many people associated with different kinds of trade,” he says. “So, if the money stops, people from all walks of life will be impacted.”
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