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Sri Lanka to raise state salaries, pensions, agriculture subsidies

Sri Lanka will raise public sector salaries and pensions by 5,000 rupees a month, give 1000 rupees to Samurdhi beneficiaries, and cut taxes on food and medicines in a relief packages, Finance Minister Basil Rajapaksa said.

Relief totalling 229 billion rupees will be given, he said. The spending is expected to be accommodated within the budget and taxes will not be raised, he said.

“The President and Prime Minister has asked for relief to be given but it is difficult due to Covid,” he said.

The salary hike would cost 87 billion rupees and pensions 40 billion rupees.

People owning land below 1 acre would be given 10,000 rupee subsidy to plant food crops.

Sri Lanka is facing crisis in agriculture following ad hoc ban on fertilizer and insecticides, which has since been lifted.

“We hope you can grow ala batala and manioc,” he said.

Farmers who lose over 50 percent of their crops due to the fertilizer issue will be paid 75 rupees a kilogram for rice.

For the plantations sector, each family will be given 15 kilograms of wheat at 80 rupees or 40 rupee subsidy.

Sri Lanka has not made a decision to go to the International Monetary Fund.

Sri Lanka allocated 2,996 billion for current spending (16.2-pct of gross domestic product) and 916 billion rupees (about 5 percent of GDP) for capital spending.

The new 229 billion rupee package is about 1.2 percent of GDP.

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