Eran
by Zacki Jabbar-July 3, 2014,
The education, health and social welfare budgets were being slashed annually because the government was following an IMF driven policy, the UNP said on Wednesday.
Financial Analyst and UNP MP Eran Wickremeratne told The Island that in a situation where the IMF propagated fiscal consolidation through a reduction in the budget deficit it was absurd for anyone to claim that the IMF did not have an influence on the policies implemented by the Rajapaksa regime.
"Whom is the IMF trying to fool? It may not be fashioning government policy directly, but it is the IMF driven philosophy of the ruling UPFA that has resulted in the continued reduction in the education, health and social welfare allocations," he noted, adding that the hidden agenda was reflected in President Mahinda Rajapaksa’s Budget speech 2014.
The President had pledged to reduce the 2014 budget deficit to 5.8 percent, 4.4 percent in 2015, 3.8 percent in 2016 and reduce the debt to GDP ratio to 65 percent. The government has agreed with the IMF to achieve these targets. So, what does it do with revenue at an all time low? It increases taxes on all essential goods and services, while providing huge tax exemptions to businesses and indirectly to Casinos through the Strategic Development Projects Act, the MP observed.
MP Wickremaratne pointed out that the education system was in a total mess with the so-called free education no longer being free. Government schools were increasingly demanding big ‘donations’ from parents of students. "This state of affairs is due to the year on year reduction of the Education Ministry budget. It will lead to the privileged getting a good quality private education while those who opt for the state system, suffering due to the lack of funds."
Public investment, Wickremeratne said, was being maintained at 6.9 percent of GDP which had gone largely into the construction of airports, ports and highways,which do not benefit the vast majority of people. He cautioned that IMF driven policies had widened the gap between the haves and have nots, which would eventually lead to social unrest.
Although the Rajapaksa regime boasted of an economic boom, revenue as a percentage of GDP had dropped to eleven percent, which was the lowest recorded since Independence. But, military expenditure remained high even though the war was over in May 2009, the MP noted.
