.

Kiri and kekiri

This year’s budget that will be presented in parliament tomorrow has evoked very little interest among the people. There was no build-up to this most important date of the financial calendar by either the government or the media and most people are not wildly interested in what will come out of what parliamentary correspondents are fond of calling ``Pandora’s box’’ on Monday afternoon.

The snap presidential election called by President Chandrika Kumaratunga prevented the presentation of the budget for 2000 as scheduled in early November. Instead a so-called ``Vote on Account’’ was presented by Prof. G.L. Peiris, in his capacity of Deputy Finance Minister. The professor promised a full budget early this year with the new president given the opportunity of presenting her/his financial plans for the country. President Kumaratunga who has held the finance ministry since the general election of 1994 will do so tomorrow, presumably through the mouth of Prof. Peiris. That at least was the past practice although there has been a hint that an unexpected flourish may be possible this year. Who knows whether the president may choose to make herself closer to parliament as demanded by proponents of the abolition of the executive presidency. The present constitution does provide for it.

The shocks have preceded the actual budget. The worst of these from the point of view of the poorer people is the diesel and kerosene price hikes that was announced some days ago after some preparatory signals were sent out by the authorities on the rise in international oil prices. At least the discerning section of the people have been aware that oil prices that were low last year had begun recovering. It was obvious to them that a price hike of at least some petroleum products was inevitable. Diesel and kerosene were the logical target despite the pervasive effect an increase would have on the people.

The country’s public transport and haulage fleets are diesel driven and as already evident fares are going up. It will not be long before lorry owners jack up their rates and the prices of everyday essentials like fish and vegetables will go up. If past experience is a guide, the price increases will be disproportionate to the actual rise in fuel cost. Traders are most adept at adding to their own margins when opportunities such as this present themselves. Although rural electrification is proceeding apace, a large sector of the population, particularly in the countryside, is still dependent on kerosene as a cooking and lighting fuel. The rural poor will surely feel the bite of the kerosene price increase which was more than twice as high as the diesel hike.

Given the imperatives of balancing the budget and the inability of the government to raise needed revenue, the oil price increase was inevitable. But the people do have grounds for complaining that their rulers have been less than honest with them about oil pricing all these months and years. Petrol prices remained unconscionably high in this country even when crude oil prices had slumped to new lows. What was done by the powers that be was to apply a cross subsidy on diesel and kerosene through petrol profits. That resulted in many economic distortions including the very large number of diesel powered under-utilized passenger vans that clog our roads. These vans often run virtually empty with just a couple of passengers. There is a terrific waste of subsidized diesel and nobody had cared a jot about this for far too long. Similarly, it is well known that some industries have long profited hugely on subsidized kerosene.

The trouble with subsidies is that it is difficult to be on target and ensure that only the needy get them. That is a problem that has long defied a solution and, in the view of most economists, a foolproof system is impossible. But where fuel is concerned, there was no transparency whatever with petrol users kept in the dark about how they were being fleeced and diesel and kerosene users not wised-up on the subsidies. At least at this point of time, it behoves the state-owned Ceylon Petroleum Corporation to come clean and tell its customers exactly what the pricing mechanism is. Giving selective figures and trumpeting that crude oil prices have doubled or near doubled just won’t do. There’s a lot more in the story and the people have a right to know.

But to get back to tomorrow’s budget, the unpleasant news seems to have been already broken and there is hope that there will be no more bad news. There is even room to hope for a little good news given that a parliamentary election is due by August. Although it will not be in the budget, the diesel price increase will force a revision of already high electricity tariffs and even those who are barely keeping their heads above water will wince when they know how much. But Sri Lankans have long lived with the reality that gazettes sometimes follow budgets if they have not actually preceded them. If the billions of rupees expended by government are properly spent and waste is controlled, even a hard-pressed people may grin and bear new burdens whatever the hardships. But the trouble is that nowhere near hundred cents value is obtained on every rupee of government spending and waste and corruption are everywhere. On top of it all we are told that MPs are planning to fill their own pockets with a substantial pay hike and arrears to boot. No wonder then that ordinary people complain. Kiri for them and kekiri for the rest of us!

| NEWS | POLITICS | DEFENCE | FEATURES | LEISURE | BUSINESS | SPORTS | ADS |