Govt targets US $4,000 per capita income in two years – Minister Susil Premajayantha

By Uditha KUMARASINGHE

UPFA General Secretary and Petroleum Industries Minister Susil Premajayantha said that the Government will definitely realise its targets and the Opposition will not have any anti-government slogans when the Divineguma programme is implemented within the next two to three years. The Minister in an interview with the Sunday Observer said whatever the Opposition says, there will be major elections in 2015 and 2016 and they will have to take up this challenge. When Divineguma program is implemented, more people and families will be benefited. So the people will decide whom to vote at the Elections. There is a fear psychosis among the Opposition parties on Divineguma.

Commenting on the losses incurred by the Ceylon Petroleum Corporation (CPC), the Minister said 60 percent of losses is due to supplying fuel to the power sector at subsidised rates. Even at present, the CPC is selling other products such as petrol, diesel, kerosene at subsidised prices while their actual cost is higher than the selling prices.

Therefore, the CPC is bound to incur losses. But the governments policy is to provide fuel at subsidised rates and ultimately the Treasury has to bear the burden. If the CPC does not provide fuel to the power sector at subsidized rates, the unit price of the electricity will be higher than the current rates.

Q: President Mahinda Rajapaksa said in his Budget Speech, that the ultimate goal of the Government is to turn Sri Lanka into a poverty-free upper middle income economy by 2016. How confident is the Government of achieving this target?

A: There are many social factors and indicators to measure the standard of a country. Among them, if you consider the per capita income, it has been increased to US$ 2,800.

The set target of the Government is to increase it to US$ 4,000 within the next two years.

The Budget Proposals have it as its aim. If you look at how capital investment is provided under the ministries it is evident that it has been so channelled as to uplift the living standards of the people below the poverty line. For example, apart from all the contributions to Samurdhi and Divineguma, there will be a special allocation of Rs. 1,500 million.

That is apart from all other capital investments. Farmers also had to suffer a lot due to the drought. Therefore, the Government had decided to waive off the interest on loans obtained by the farmers. The loans will be recovered after the next harvesting season. Likewise lot of concessions have been given to farmers under the Divineguma program and there much expectation to uplift the living standards of those below the poverty line.

Q: The Opposition which makes a lot of criticism on the Budget says that it has given relief only for the super rich through the reduction of import duty on racing cars. What are the positive features in the Budget favourable to the ordinary people?

A: Actually the import duty reduction was given to promote the sports economy in the country and also to help those who engaged in sports. I don’t think many sports cars will be imported to Sri Lanka as a result of this duty concession.

There are one-seater cars which can accommodate only the dirver. My calculation is that there will be on the whole less than 25 sports cars. At present the Opposition does not have any issues to take up. So they try to generalize this very small issue. Can we find people who can drive sports cars in the country? There will be a very few. Therefore, the allegation by the Oppostion is not tenable when one considers the various concessions given to the public by the Budget.

If we consider the positive relief measures in the budget, there is the Rs.1,500 allowance to 1.3 million public servants. The allowance to pensioners has also been increased. After 32 years, the July strikers who lost their jobs in 1980 have also been given a Rs.5000 monthly allowance.

The Budget has also proposed to give a pair of shoes and extra school uniform material to students in rural schools. The Budget has proposed to raise the present guaranteed price for paddy from Rs.28 to Rs.30 per Kilo to Rs.32 to Rs.35 per Kilo from next Maha season. If the farmers use organic fertilizer, they will be given a guaranteed price of Rs.40 per a kilo of paddy.

The Budget has encouraged farmers to use more organic fertilizer. If we can improve the use of organic fertilizer, then we can reduce the number of people affected by pesticides and chemical fertilizer. The farmer community has been encouraged. Therefore, a vast majority of the people have been benefited by the Budget. A tax has also been imposed on imported foreign liquor. But the Opposition is not talking about it. Actually foreign liquor is consumed by those who can afford to buy it. Now they have to pay more. When one considers all these aspects, I think there are lots of genuine and fair proposals in the Budget.

Q: There are contradictory views among the constituent parties of the Government on the 13th Amendment. What is the Government’s exact position on 13th Amendment?

A: So far we have not yet discussed it within our party. The constituent parties of the UPFA are free to express their views on any matter. After Opposition Leader Ranil Wickremesinghe made a statement on this particular matter in Parliament on Wednesday, Leader of the House and Irrigation and Water Management Minister Nimal Siripala de Silva clearly explained the Government’s position. As the Minister said in his speech the unchanging standpoint of the Government is to appoint a Parliamentary Select Committee representing all the parties to discuss this issue and recommend a home-grown solution.

Q: President Mahinda Rajapaksa has called for a new form of devolution in his budget speech. Does the Government already have a proposal or whether it will be discussed at the Parliamentary Select Committee (PSC)?

A: According to Mahinda Chintana, powers will devolve to grassroots level under the Jana Sabha system. Under the Divineguma program, there are graduates at grassroots level development gathering data. In future, the intention of the Government is to devolve powers to the people at grassroots level.

Q:What is the delay in not commencing the deliberations of the PSC?

A: Actually it is mainly due to the opposition parties not nominating their representatives to the PSC. It is up to the Opposition to decide on the participation in the PSC. But they have not yet nominated their members.

Q: Regardless of whether the system of devolution is going to be changed or not, is the Government ready to hold the Northern Provincial Council elections as promised by the President?

A: It was also in the Budget Speech that there will be Provincial Council elections in the Northern province next year. The President in his Budget Speech said that the Government was firmly committed to conduct the Provincial Council election next year, to facilitate democratic representation to promote peace and development.

Q: What is the significance of the Divineguma Bill?

A: At the moment, we have the Samurdhi Authority, Southern Development Authority and Upcountry Development Authority. The Samurdhi Development Authority was formed in 1995. Since the inception of Samurdhi program, our primary objective was to uplift the living standards of the people who are below the poverty line. Since the inception of Samurdhi program there were about 1.9 million low income families and the poverty level was around 23 percent. After 17 years, we have been able to reduce it to 8.9 percent.

The total number of 1.9 million low-income families has been reduced to 1.2 million. There is a great success of the Samurdhi program. Now the Government’s intention is to ensure more participation and convert each and every household into a self-sufficient entity. This would help cultivate vegetables and start small industries at domestic level.

This would also encourage women in rural areas to engage in small industries at cottage level and generate some income. The idea is to reduce expenses on food items and generate income so that the people will be able to lookafter themselves with their means. If we can get one million families involved, then they will be able to reach that level.

The next step of the Government is to ensure the involvement of two million people. Likewise we will improve the number of families. At the moment, we don’t have any legal framework to ensure people’s involvement.

The broad base of the Divineguma Bill has not only targeted the people who are below the poverty line and Samurdhi beneficiaries but also other people who can get involved themselves and uplift their socio-economic conditions. That is how the Government is going to achieve per capita income of US$ 4,000 by 2016.

Q: In a situation where the Government has given a clear picture on Divineguma Bill, what is the rationale behind the Opposition to oppose it?

A: The Opposition is well aware that the Government can definitely achieve its targets once the Divineguma program is implemented within the next two to three years.

Of course then the Opposition will not have any slogans. Whatever they say, there will be major elections in 2015 and 2016 and the Opposition has to take up that challenge. When the Divineguma program is implemented more people and families will be covered by it. So they will decide to whom they should vote at the next General Election.

There is fear psychosis among the Opposition parties on Divineguma. But there are some political parties which are canvassing for devolution. Their main slogan is that the Government is planning to take away powers given to the Provincial Councils under the 13th Amendment which is not so. That is how they are attempting to capture more votes at elections by using this slogan.

Q: President Mahinda Rajapaksa in his Budget Speech extended a warm invitation to the Opposition Leader and the Leaders of TNA and JVP to cooperate with the Government constructively to solve the problems affecting the people. How do you view this appeal by the President at this juncture?

A: That was an open invitation by the President to the Opposition to participate in the PSC deliberations to find a lasting solution to the current issues as well as economic development.

The Government is planning to attract many investments within the next couple of years. You can see in Colombo and even in some other urban areas, that many new investments are coming in. That is why the President invited the Opposition parties to cooperate with the Government to solve the major issues of the country.

Q: Has the Opposition been able to make any constructive criticism on the Budget 2013 during the second reading debate>?

A: The Opposition always makes baseless allegations. That is the nature of the Opposition. They don’t have any alternative proposals to overcome those issues.

Q: Has the Sapugaskanda oil refinery issue been resolved and the refinery is back at work? What is the impact of not getting oil from Iran?

A: If we don’t get oil from Iran, we have to depend on other alternatives. We have to run our refinery. When there is a shortage of refined products, we don’t have that danger, because we have our refinery. So one third of the domestic demand can be met from our refinery. On the other hand, nearly 1,300 workers are working there. We are getting furnace oil, bitumen etc. At the moment, we are not making much profits. Because 40 percent of the refined products-furnace oil is given to the power sector at subsidized rates. That is the main reason as to why we are not making profits. But still we have to run the refinery.

Q: What has led the Ceylon Petroleum Corporation (CPC) to incur huge losses at the moment?

A: Everyday CPC has to supply 2.4 million litres of fuel oil to the power sector to generate power. Actually the cost of a litre of fuel is somewhere around Rs.103 but a litre is sold to the power sector at Rs.65. So the CPC is loosing Rs.38 per each litre. When 2.4 million litres are multiplied by Rs.38, the CPC is loosing Rs.92 million every day. If we multiply this Rs.92 million by 365 days, the loss incurred by the CPC per year is Rs.33,580 million. On the other hand, we have to import low sulphur especially for Kerawalapitiya power plant. Its daily consumption is one million litres.

The CPC is selling a litre at Rs.75. But the actual price of a litre is Rs.110. As a result, the CPC is also loosing Rs.35 per litre. Again, the CPC has to incur Rs.35 million as losses everyday. When this Rs.35 million is multiplied by 365 days, the CPC is losing Rs.12,775 per year. Therefore, 60 percent of losses incurred by the CPC is due to supplying fuel to the power sector at subsidized rates. Even at the moment, we are selling other products such as petrol, diesel and kerosene at subsidized rates. Their cost is higher than the present selling prices. Therefore, the CPC bound to incur losses.

The Government’s policy is to provide fuel at subsidized rates and ultimately the Treasury has to bear it. If we don’t subsidize fuel to power sector, the unit price of electricity will be higher than the prevailing prices. That is why there is a proposal in the Budget 2013 to encourage the cultivation of energy crops such as gliricidia to generate alternative power and reduce the use of fuel for power generation. We have also taken a policy decision to introduce natural gas in liquid form. Then we will be able to overcome this situation within the next couple of years. At the moment, we spend one third of our oil imports on the power sector. In future, we will be able to reduce it. We are spending about 6 billion dollars on oil imports. Oil prices are also going up as a result of sanctions imposed on Iran. They supply about 20 percent of oil to the world. As a result, lots of countries specially some European countries are suffering at the moment. Despite all these challenges, the Government has been able to present a very realistic Budget.

Q: What is the progress with regard to oil exploration? Are there any positive signs?

A: Yes. There are positive signs. I have been given the feedback by Director of the Petroleum Resources Development Agency. The Cairn Company will start the next stage within the first few months of next year. After evaluation, they will go for commercial viability. I think according to their information, most probably, the natural gas deposits in those areas are sufficient and the commercial viability is there. If we can get natural gas within the next three to five years, our future will be alright.