How Sri Lanka was ruined!

Ugh! See what non patriotic leaders can do to their country.

The Sri Lankans voted for Rajapakshes knowing very well what they did in the past, including corruption, selling out national assets to China, dynastic politics et all. They still voted for them because the Rajapakshes promised things they could not refuse.

  1. Their GST, called VAT tax, on all products was reduced to 8%, thus making everything cheaper in one stroke. (It also killed the government revenue). People loved things getting cheaper.

  2. The minimum Income Tax threshold was changed from 5 lakhs per annum to 30 lakhs. Very few earned more than 30 lakhs! A very large part of the population became tax exempt. This was very popular among the salaried class.

  3. For those with income over 30 lakhs, the upper ceiling of maximum personal tax of 15% was created, so no one paid over 15% tax. For comparison, it is around 42% in India and between 40 to 60% in many developed countries.

  4. Corporate tax was promised to be reduced to 14%. Every corporate supported and funded the Rajapakshes.

  5. They abolished seven other taxes, including a 2% nation building tax paid by businesses.

  6. Zero tax for many industries like IT services and hotels that serve tourists etc.

  7. Various taxes imposed on religious institutions were promised to be scrapped. Sri Lanka's powerful Buddhist Monks campaigned during election times to vote for the Rajapakshes.

  8. Individuals and companies engaged in agriculture, fisheries and livestock farming were exempted from any taxes for the next five years.

  9. The daily minimum wages of tea workers were raised to Rs.1,000/- and instantly got all their votes.

10. Minimum salary for private company employees was fixed at Rs.12,500/- per month. Every low income family loved it.

11. Tax on retirement gratuity was reduced from 24% to 15%. All senior citizens loved it.

12. Pensions were awarded to state bank employees who were not eligible. Those employees loved it.

13. 15% VAT on apartments was scrapped. Young home buyers and construction industry loved it.

14. Fuel prices were kept artificially low. They bought Petrol from India and still sold it at prices lower than that in India. No tax revenue there, either.

15. In a hurry to make Sri Lanka a developed nation, they went on an infrastructure building spree financed financed by Chinese loans. Infrastructure that they could not use for productivity. Those projects became white elephants.

The Rajapakshes delivered on those promises promptly as soon as they got into office. They bankrupted the country in the process.

In trying to get so many things for free, the Sri Lankans actually ended up paying much higher prices. Now, Sri Lankan rupee trades for Rs.300/- per dollar. For an import-dependent country, this means everyone's savings got reduced by the same ratio. Their buying power decreased, their salary did not increase in proportion to the inflation. Thus everyone, actually, ended up with smaller incomes.

Besides monetary issues, it destroyed the country, has caused a lot of human suffering with 15 hour power cuts, lack of food, civil war and political instability.

My take.

Populism is fraught with danger; the political parties fighting the elections, using this as a tool, would be asking for trouble. Taxes - however detestable - are required to be collected from the people for developmental purposes.

And that's what worries me about our own Aam Admi Party, winning Delhi and the Punjab during the Assembly elections in that it is using up the assets built up over a period of time without ensuring the recharging of the treasury through rightful inputs!

Tailpiece.

Got up around 6, the chores and was ready by 10. Mini had got up earlier as she went to the Guruvayur temple at 7, chauffeured by Hameed.

Had gone across for Dr Rani Menon's review of my eyes, post surgery. She has told me to carry out the massage of the eyelids and resort to hot water fomentation.