The massive relief package offered by the Government could not have come at a more fitting time when the public were being squeezed in on almost all fronts, chief of which is the Cost of Living (CoL) which had shot through the roof during the last couple of months. Finance Minister Basil Rajapaksa announced the bonanza at a media briefing on Monday. Minister Rajapaksa reserved the biggest relief package to public servants, which will now silence his critics in the Opposition who took delight in misquoting him on a reference he made with regard to the Public Service during his Budget Speech.
Minister Rajapaksa revealed that Cabinet approval was received to pay all public servants a monthly allowance of Rs. 5,000 from January, with the pensioners too to receive the identical sum with their monthly pensions. Teachers and Principals who had their salary anomalies rectified through budgetary provisions will also be entitled to the Rs. 5,000 on top of their increased salaries.
The Minister said over 1.5 million public servants, including those employed by statutory bodies, will benefit from the move plus some 600,000 pensioners. In addition, Samurdhi recipients who are receiving Rs. 3,500 per month will be entitled to an additional Rs. 1,000 while farmers will receive Rs. 75 for a kilo of paddy. Plantation employees who contribute to the EPF are to receive 15 kilos of wheat flour at Rs. 80 per kilo, a reduction of Rs. 40 per kilo from the current price. In a bid to encourage local food production, a decision was also made to pay Rs. 5,000 for cultivations in home gardens of less than 20 perches each and Rs.10,000 for home gardens of not more than one acre each.
The Cabinet also decided to remove all import and other taxes on medicines and essential food items subject to protection afforded to farmers when bumper harvests are received. Minister Rajapaksa asserted that no taxes or levies will be imposed on the public to raise the Rs. 229 billion needed to meet the total cost of the relief package.
Certainly this measure to alleviate the hardships of the public is to be commended, although admittedly the CoL has now outpaced whatever relief measures that may be forthcoming as a result of inflation precipitated by the Dollar crisis and depleted foreign reserves. Hence, while offering such relief, all steps should be taken to ensure that the CoL is kept at manageable levels so that whatever quantum of relief offered would not get eroded.
This is where bodies like the Consumer Affairs Authority (CAA) could step in and play a more pro-active role. True, prices are determined by market forces in an open economy and dictated by the concept of supply and demand. But there are elements who seek to exploit the situation as we have already experienced and it will be the duty of the CAA to rein in such forces and ensure that the consumer is not fleeced.
Of course, with more money in circulation with the extensive relief package, this could contribute to further inflation. It will be the task of the economic pundits in the Government to ensure the package is not rendered worthless through such a scenario. The move to remove taxes on medicines certainly will be a great relief, particularly to senior citizens and pensioners who are dependent on life saving drugs, the prices of which have multiplied several fold leaving these souls helpless. Exacerbating the problem is the drastic drop in the interest paid on bank fixed deposits leaving these vulnerable segments at their wit’s end.
There could be price manipulation by some pharmacies denying the benefit of the relief to the public. The primary concern of the Government will be to ensure that the benefits of the relief package are enjoyed by the public without delay. Otherwise it will amount to a waste of scarce financial resources which the country could ill afford at this juncture.
The Government has been prompted to grant this relief package upon a palpable feeling for the people’s plight. President Gotabaya Rajapaksa acknowledged the hardships faced by the people in a recent Address to the Nation and called for the cooperation of all to lift the country out of the present crisis. Hence, it is important to ensure that the people’s plight is ameliorated by whatever relief is offered by the Government.
The relief package should also in some way be extended to uplift the condition of the self-employed, a majority of whom are still suffering from hardship due to job losses, not forgetting the collapsed businesses and small scale industries which were forced to put up shutters, throwing thousands out of employment. Minister Rajapaksa in his budget speech pledged to offer relief to all segments affected by the pandemic and in fact, made budgetary provisions in this regard. Hence, it is important that these segments too are considered at the same time public servants are looked after. After all, the public servants continued to receive their salaries even during the lockdowns. Not so the self -employed. Their plight too deserves due attention.
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