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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2739

Sri Lanka Government announces drastic rate cuts to bring down the cost of living in 2009

Ruwan Weerakoon reporting from Colombo

Colombo, 31 December, (Asiantribune.com): At a special Cabinet meeting held yesterday evening, Sri Lanka Government announced massive rate cuts on many items, including fuel and gas, which will take effect from today.

This announcement was made after a special Cabinet summoned by Sri Lanka President Mahinda Rajapakse in order to discuss several urgent issues pertaining to the cost of living for the coming year.

At the special cabinet meeting 'The Economic Stimulus Package,' for consumers, industrialists, exporters and the plantation sector, worth a total of Rs 16 billion, was decided.

The cabinet decided to bring down the prices of gas and several petroleum products with a view to strengthening the economy and bringing relief to the consumer, Minister of Trade, Marketing Development, Consumer Affairs and Cooperatives, Bandula Gunawardena announced in a special media briefing at the Government Information Department.

Accordingly, the price Laughfs Gas was reduced by Rs. 276, Shell Gas by Rs. 166, Petrol by Rs. 2.00, Kerosine by Rs. 10, Diesel by Rs. 10 and Furnace Oil by Rs. 10.

In a special relief package for three-wheel operators, it was decided that a coupon system would be introduced where up to 4 liters of petrol would be given to each three-wheeler at Rs. 20 less than the regular price for a maximum allowance of 75 liters a month.

Also cabinet decided to reduce state expenses by five percent, MPs expenses by five percent, ministers’ expenses by ten percent and the President’s and Prime Minister’s expenses by 15 percent.

Furthermore the monthly rent allowance of Rs.100,000 given to ministers will be cut by 50 percent. A sum of Rs 3 billion would be saved by these cuts, it was revealed.

Investment Promotion and Enterprise Development Minister Dr. Sarath Amunugama said that the government’s objective was to sustain the country’s economic growth rate at six percent during the next year as well, despite the impact of the global economic meltdown.

To achieve this target, the minister said, a relief package was given to the plantation sector which had been hit hard by the global situation today.

Dr. Amunugama said that capital loans would be provided to the tea industrialists at a concessionary interest rate, and the recovery of already granted loans would be suspended for the next year.

The cess levied on tea imports would be increased to protect local production.

"We will purchase tea through State Trading Institutions to be supplied to Iran and Russia on credit. mixed fertilizer will be issued to tea smallholders at Rs. 1000 per bag of 50 kilos. These facilities will make the tea industry a viable one," Dr. Amunugama said.

For the tourism sector, debt relief will be given.

The government will guarantee a stable price of Rs. 150 for a kilo of rubber next year, and an additional five percent cess will be imposed on rubber imports to sustain the local production.

There will be concessions for the cinnamon plantation sector as well, he said.

Non-Cabinet Media Minister Lakshman Yapa Abeywardane said that plans would be put in place to give a stable price of Rs. 45 for a kilo of tea leaves, and Rs. 300 for a kilo of manufactured tea.

Export Development and International Trade Minister Prof. G.L.Peiris said that incentives were given to the industrial sector to ensure that there would not be any loss of employment in any of the sectors.

"The policy of the government is to fully participate in the economic activities. A country cannot achieve economic progress without the active participation of the government in the economy. We will never let unscrupulous traders to control the economy," he said.

- Asian Tribune -

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