Today Members of both the Government and the Opposition are up in arms against the recent salary hike granted to the employees of the Central Bank of Sri Lanka (CBSL)
As per the constitution Parliament should approve any salary hikes for Central Bank officials as it is the legislature that has the power over finances.
As per the exposure that taken place at the parliament The monthly salary of a Deputy Governor of the Central Bank has been increased to Rs. 1.6 million while a peon’s salary has been increased by Rs. 70,000.
Burning question herein is did CBSL staff including its governor perform any special role to become entitled to an exorbitant salary?
27 Aug 2023 Sunday times revealed that Nanadalal Weerasinghe announced debt default in the backdrop where the government was expecting to receive US$ 10.7 billion loan .Said Doller loan was expected to be procured from several overseas parties. That means bankrupting the country is a planned conspiracy
During Economic crisis India made massive profits in all fields under the guise of helping Sri Lanka. It is well evident Nandalal support the economic decisions that taken in favor of India.
Printing money is an easy job. But goods and services cannot be printed. Nanda Lal did not support to increase the production. He just printed the money.
Generally when the money is printed, the demand increases. As a result prices rising.
When the government prints money, it comes to the public. Subsequently, people use that money to buy petrol, sugar, milk, and electrical appliances etc. Most of these items imported its revolves dollars. Although Rupees can be printed Dollars are not. As a result, It creates a Doller shortage.
Accordingly, central bank took 2 serious action that,
1. Raising interest rates
2. Restriction of imports
The moment CBSL take these decisions the interest rate for bank deposits was 17%. inflation was 58%. In such a situation, people did not deposit money in the bank.
Nevertheless, Increasing interest rate worsen the crisis. CBSL decision forced Commercial banks to increased the interest rates . it is undisputed fact that, No one start Businesses in a situation where interest rate is high . All above, Raising interest rates badly affected the stock market.
There are three categories of imports in Sri Lanka. These are consumer goods, intermediate goods, and investment goods. The largest portion is intermediate goods, which is 57%.This category contains inputs for manufacturing . Imposing restrictions on these goods resulted many companies to shut down and reduction in the GDP.
When the country is facing a crisis, it is dangerous to apply the book theories as it is. The economy of Sri Lanka collapsed because of such applications. In fact, the central bank boss and the staff are the executors of the economy, not the saviors. But they got the fame of rebuilding the economy. They were privileged.
As how Nanda Lal announced non-payment of foreign debt without informing Parliament. Similar manner he got CBSL salary increased. Before going home, Nandalal took a brutal salary increment. But Nandalal is a hero, people used to blame politicians.
