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Mahinda Chinthana subsidies will cost Rs. 10 billion a year
By Dilip Rangajith
The government will have to spend an additional Rs.10 billion next year to provide fertilizer subsidies, increase Samurdhi benefits and provide mid-day meals for school children as promised in the “Mahinda Chintanaya”, a Sunday Times study shows.

To provide a 50-kg bag of urea at Rs. 350, the government will be forced to increase its subsidy to the private sector involved in the imports. Accordingly, the current subsidy of Rs.23,000 per metric ton of urea will have to be increased by Rs.4,000.

The additional subsidy for urea alone will cost the government Rs.1,400 million a year as about 350,000 metric tons of urea are used annually. However, if the prices of other fertilizers are also reduced to Rs.350 a bag, the government will have to provide an annual subsidy of Rs.3,500 million. Currently no subsidy is provided for other fertilizers, the Sunday Times study shows.

The Samurdhi payment, if increased by 50 percent as promised in the “Mahinda Chintanaya” will cost the government an additional Rs.4,650 million annually. Currently the government bears Rs.9,370 million for some 1.8 million Samurdhi families every year.

The “Mahinda Chintanaya” has also promised to pay Rs.250,000 in the event of death or incapacitation in the family and additional Rs.2,500 payment in respect of child birth.

To provide mid-day meals for schoolchildren, the government will have to spend more than Rs.1,400 million a year. An estimated 4.2 million schoolchildren are expected to benefit from the scheme.

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