ECONOMYNEXT — If Sri Lanka were to accommodate the ongoing demands for wage increases in the state sector, it would cost the country 8 billion US dollars, which no party that would come into power could afford to do at present, President Ranil Wickremesinghe said.
Speaking at an event on Saturday July 06, Wickremesinghe said the government recognises the difficulties faced by the public but the increasing the salaries as demanded by teachers development officers and other government workers would be challenging.
“We recognise the difficulties faced by the people and are committed to stabilising the economy and providing relief in a balanced manner. However, some people are now calling for further salary increases. This is a challenging task. We have already given teachers a salary increase in 2022 and a 10,000-rupee stipend in 2024. These additional demands are unfair, as those who received two benefits should recognise that others received only one,” said Wickremesinghe.
“Development Officers and clerks are also requesting salary increases. However, there is no available funding for these increases. To accommodate such raises, taxes would need to be increased. Currently, value added tax (VAT) is set at 18 percent. If we were to provide these allowances, we would have to increase VAT again, which the people cannot afford,” he said.
The president said that the government workforce should ideally be one million, but it currently stands at 1.5 million.
“Some proposed sending 500,000 employees on unpaid leave and later suggested paying them. They claimed that VAT need not be increased to 18 percent to pay salaries for one million employees. In response, I said no one can be sent back. The government cannot afford to increase public servant salaries this year after raising VAT and facing public criticism,” he said.
“If such a salary increase is given, it will inconvenience the public. We need to prepare for the elections starting in the middle of this month. However, we have already appointed a committee to review these salary revisions for next year and are working to allocate the necessary funds in the 2025 budget.”
Wickremesinghe accused “some people” of trying to undermine the country’s economic progress.
“If we accommodate these wage increases now, we will lose 8 billion US dollars. Given the current state of our economy, no party can afford this. As we move forward, we should focus on transforming our economy into an export-driven one. To this end, we have introduced the Economic Transformation Law. As a result, modern agriculture is being established in the country. This provides the opportunity to develop the Uva province into a significant agricultural export area.
“Additionally, the tourism, agriculture, and information technology sectors can be developed in the Badulla district. We need to create a new economy in our country. However, if our future generations are destroyed by drugs while we work towards this goal, our efforts will be in vain. It is your responsibility to protect the youth,” he said. (Colombo/Jul08/2024)