People’s Bank lent Rs. 4 bn. to a minister

Ravi slams Central Bank, alleges 

by Saman Indrajith-August 11, 2018, 8:14 pm

Former Finance Minister Ravi Karuna-nayake says that his successor, Minister Mangala Samaraweera, is being misled by a group of ministry and central bank officials.

Participating in the Second reading stage debate on the Value Added Tax (Amendment) Bill in Parliament on Thursday, Karunanayake said that a small group of officials in the finance ministry and the central bank were ruining the economy.

"These officials have become the hindrance to develop the country and its economy. They lead Minister Samaraweera astray. This group of officials should be removed if the economy is to be saved," he said.

People gave power to the UNP and welcomed the national government hoping that it would salvage the economy which was in tatters and provide relief to people, he said.

Continuing the Minister noted: "During the 100-day government we laid the foundation for that and got many areas streamlined to provide relief to the people. We had to introduce VAT because there were no funds sufficient to pay the interest and capital of loans the previous governments had taken. But we managed to increase the salaries of public sector workers, bring down prices of essential items and fuel and gas and to pay compensation to people who had been hit by natural disasters.

"We were taking the country on the correct path towards development. At the time I took the office of Finance Minister, the national income was Rs. 1,220 billion. I was able to increase it to Rs 2,000 billion as at June, 2017 and it was 15.1% of the GDP.

"Even Health Minister Dr. Rajitha Senaratne had noted recently that some officials of the central bank do not support the government projects. Not that all officials are saboteurs, but there is a group comprising 1-2 per cent of officials who throw a spanner in the development works. They hinder the development plans.

"When VAT was introduced, it was our intention to bring the percentage from 15 per cent to 8 – 9 per cent within couple of years. It could have been done by this time had it not for the group of officials sabotaging our government’s work.

"Today revenue coming from the Excise Department has decreased by 35-40 per cent. It is because the department’s work had been placed under the responsibility of officials prone to corruption. When I took the department under my ministry, its revenue was Rs 2 billion per month. But at the time I left office, I was able to increase it to Rs. 12 billion a month. Now, excise revenue has come down to Rs. 8-9 billion rupees per month.

"The case is similar with the Customs Department. We had increased customs revenue but now it has come down. The Inland Revenue Department recorded a growth of revenue collection by 35 – 40 per cent under my watch.  There was a plan to upgrade it in January this year but so far the changes have not been implemented.

"Except for the departments permitted to idle, the Central Bank was filled with some henchmen of former President Chandrika Kumaratunga. They were the officials who had recorded first-ever negative economic growth. They have been put into the top places of the Central Bank. They can never take this country forward; they could only take it backwards"

MP Karunanayake found fault with the supervision unit of the Central Bank for its alleged failure to probe the lending of Rs. 4 billion by the People’s Bank to a Minister. The Central Bank should be questioned on its failure to probe into the lending of such an enormous amount of money to a minister, he said.

Minister Karunanayake further said: "Former Lankaputhra Bank Chairman, Lasantha Gunawardene was sacked for approving a loan of Rs 800,000. Now who is questioning how the People’s Bank gave four billion rupees to a minister. There is another instance of giving Rs 10,800 million to Jehan Amaratunga. The Supervision Unit of the Central Bank has done nothing. I am questioning the Governor of Central Bank and ask him why is he silent on those deals.

"Some officials in the Finance Ministry and the Central Bank are trying to create a rift between the President and the Prime Minister. These officials are incapable. They did nothing to prevent the depreciation of the rupee against the dollar, which was at 137-139 at the time I left and it is now 160.

"Central Bank officials are a bunch of puppets dancing to the tune of IMF dictates. Their predictions are wrong. They predicted a decrease in inflation but it has increased from 2.1 per cent to 5.4 per cent".