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“Current govt. forced to borrow heavily to repay previous debts”

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Senior Professor Wasantha Athukorala of the Department of Economics and Statistics at the University of Peradeniya revealed that the previous government had borrowed approximately Rs. 800 billion per month from the domestic market without any repayment plan. The current Government is compelled to borrow to repay these loans, he added.

Professor Athukorala emphasised that the current Government is paying off a significant amount of debt accumulated through Treasury Bills and Bonds by previous administrations. The Government will have to borrow to repay Rs. 4,859 billion in Treasury Bills and Bonds maturing over the next year.

Responding to allegations of large-scale borrowing by the current Government since assuming office, Professor Athukorala stated that the majority of the funds the Government is borrowing now is to settle previous loans. The former governments had no concrete plans to repay these loans, which forced the current Government to continue borrowing to meet these obligations.

Highlighting the scale of previous borrowings, he said that around US$ 12 billion of the US$ 17 billion borrowed through International Sovereign Bonds was taken between 2015 and 2019. This accounts for nearly 70 percent of the total foreign borrowings during that period. With Sri Lanka’s credit rating downgraded by agencies like Fitch, the country has lost the ability to borrow from foreign markets.

He also noted that even though foreign loans have decreased, Sri Lanka is still borrowing from bilateral and multilateral institutions. Even if foreign loans are restructured, the country will eventually have to repay them. Domestically, the government raises funds through Treasury Bills and Bonds every week to meet its financial needs.

Looking ahead, the Government will need to repay Rs. 3,774 billion in Treasury Bills from November this year to November next year. Additionally, Rs. 13,237 billion in Treasury Bonds must be settled by March 2045, and Rs. 1,125 billion in Bonds will mature next year. In total, Rs. 4,859 billion will mature between this November and the next.

These loans, borrowed from local banks and financial institutions, cannot be avoided. Failure to repay them could plunge the banking system into crisis. Therefore, the Government will continue to borrow from the market every week to meet the maturing debt obligations.

While previous governments borrowed to repay loans without any long-term plan to reduce the debt burden, the current Government needs a strategy to address this ongoing debt. Each month, the Government borrows approximately Rs. 400 billion to meet debt repayments. From January to August of this year, the Government borrowed about Rs. 800 billion per month from the domestic market, compared to last year.

Professor Athukorala stressed the importance of establishing a plan to reduce borrowing gradually. Over the next five years, the Government should aim to reduce monthly domestic borrowings to around Rs. 200 to 250 billion to ensure sustainable debt management. Such a plan would help avoid future debt crises. He also observed that while previous governments often wasted borrowed money, there are signs that wasteful spending is decreasing under the current administration, which is a positive development.

(Daily News)

(Except for the headline, this story, originally published by Daily News has not been edited by SLM staff)

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Distribution of polling cards for general election continues today

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The Department of Posts has designated today as a special day for distributing polling cards for the upcoming 2024 general election. 

Senior Deputy Postmaster General Rajitha Ranasinghe announced that 2,090 distribution offices will be open, with 8,000 staff assigned to the task.

Polling cards will be distributed from 8:00 AM to 6:00 PM, and the public is urged to cooperate throughout the process.

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Landslide warning issued for eight districts

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The National Building Research Organisation (NBRO) has issued early landslide warnings for eight districts due to the ongoing heavy rainfall.

The warnings have been issued, effective from 05 pm today (02) to 05 pm tomorrow (03).

Accordingly, the warning notices under Level 02 have been issued to the Kalutara, Kandy, Kegalle, Matara and Ratnapura districts.

Early landslide warnings have been issued to Bulathsinhala in the Kalutara district, Udapalatha and Yatinuwara in the Kandy district, Bulathkohupitiya, Mawanella, Dehiowita and Kegalle in the Kegalle district, Pasgoda in the Matara district and Ratnapura, Eheliyagoda, Elapatha, Kuruwita, Kahawatta, Godakawela and Pelmadulla in the Ratnapura district.

Meanwhile, Level 01 early landslide warnings have been issued to Welimada and Haldummulla in the Badulla district, Elpitiya in Galle district and Polgahawela in Kurunegala district.

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Government Quarters Handovers Delayed for Five Former Ministers

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The Ministry of Public Administration has announced that the takeover of government quarters occupied by five former ministers has not yet been completed due to several ongoing issues with the quarters.

The ministry has urged the former ministers to resolve these problems promptly.

Action will be taken to conduct inspections of the government quarters if they are not handed over by next week.

Additionally, the ministry stated that legal action will be pursued if it is found that a former minister or their close relatives are still residing in the properties in question.

(News1st)

(This story, originally published by News1st has not been edited by SLM staff)

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