- President instructs Finance Ministry to draw funds from Consolidated Fund
- Tourism, apparel, foreign employment, IT and SMEs to benefit from debt repayment moratorium, low interest loans
- 6-month moratorium on repayment on loans, working capital loans at 4% interest
- Billions to go towards setting unpaid bills to contractors, suppliers and banks
- Rs. 500 m for COVID-19 eradication programs
By Chandani Kirinde
The Government yesterday announced a fresh stimulus package for five sectors hardest hit by the new coronavirus (COVID-19) and allocation of billions of rupees to settle unpaid bills from 2019.
Information and Mass Media Minister Bandula Gunawardana
– Pic by Lasantha Kumara
President Gotabaya Rajapaksa has already authorised the Secretary to the Finance Ministry to draw funds from the Consolidated Fund using powers vested in him by the Constitution.
Government Spokesman Minister Bandula Gunawardana said Cabinet approved the proposal by the President to allocate the authorised funds to sectors that are in urgent need of support as well as Rs. 500 million for COVID-19 eradication programs. The sectors that will benefit from the latest stimulus package are tourism, apparel, foreign employment, Information Technology (IT) and the Small and Medium Enterprises (SMEs).
They will get a six-month moratorium on repayment on loans as well as bank loans to raise working capital at 4% interest with effect from 20 March, Gunawardena said.
The IT and apparel sectors too will be provided with concessions for overtime, holiday leave, etc., payments to workers.
The necessary instructions will be sent to banks by the Central Bank shortly, Gunawardena said.
“The impact of the coronavirus has hit these sectors very baldly. Not only hotel owners, but all those who depend on tourism to make a living are ,affected while those in the foreign employment field too are facing difficulties as the overseas job market has dried up due to the spread of COVID-19,” the Minister said.
“The others are the IT sector, particularly companies providing Business Process Outsourcing (BPO), as countries they provide services are being locked down, while the apparel sector is facing multi-pronged problems. Our biggest apparel buyer is the USA followed by Europe and these countries are affected by the coronavirus pandemic. The sector also depends mainly on China for its raw admirals, be it cloth, thread or buttons, and here too they are facing shortages,” Gunawardena added.
He said unpaid bills for services procured by the previous Government too would be settled with the money drawn from the Consolidated Fund, so that suppliers, contractors and banks which have been burdened with heavy debt due to poor fiscal management by the previous Government would get some relief before the Sinhala-Tamil New Year.
Cabinet has approved Rs. 10 billion towards settling the bills procured for obtaining medicine, Rs. 3 billion to settle the procurement bills of fertiliser, Rs. 5 billion for settling bills of small and medium scale construction contractors, and Rs. 46 billion for the interest applicable for senior citizens’ deposits that had not been paid for two years.
A part of the relief package also includes a maximum retail price of Rs. 65 for a kilo of red legumes (dhal) and a maximum retail price of Rs. 100 for a 450-gram tin of canned fish.
“The reduction in the price of a kilo of dhal is almost 100% while the canned fish price is also down sharply. These cuts are for the benefit of lower income groups who struggle to get three square meals on their plate and there are many such families in this country,” he said.