Basil meets Indian PM Modi to finalize agreements for temporary bail out to economic crisis

Finance Minister Basil Rajapaksa met Indian Prime Minister Narendra Modi today in New Delhi as the government is seeking assistance from the neighbouring nation to temporarily bail-out Sri Lanka’s economic crisis which was further compounded by a shortage of dollars.

Sri Lanka’s High Commissioner to India Milinda Moragoda was also present at the meeting along with senior officials from both sides. 

Minister Rajapaksa left the island for India on a 2-day official tour yesterday following his meeting with visiting IMF Asia and Pacific Department Director Changyong Rhee.

He was accompanied by Finance Ministry Secretary S.R Atygalle keeping the Treasury virtually headless for a couple of days, official sources said. 

The IMF has said the country’s debt is unsustainable but is willing to assist the country in whatever way. However Sri Lanka is reluctant to agree to an IMF package to stave off a debt problem as it would involve unpalatable decisions on the island’s economy.

 The aim of the New Delhi visit is to sign the agreement to obtain a loan facility of US$.1 billion to purchase essential food items, fuel, medicinal drugs and other commodities. 

This visit was postponed twice before as the Indian side was not ready to receive the Sri Lankan Finance Minister for various reasons including Colombo giving in to several demands. In this context, Colombo has signed various deals with Indian state and private companies for solar power and wind power projects.