Finance Minister says BASL proposals for 18 month interim govt best solution

Finance Minister Ali Sabry today told Parliament that it may take two years for the recovery of the economy and called on political parties to agree to a proposal of the Bar Association of Sri Lanka to form an interim government for 18 months.

Mr Sabry in a special statement to Parliament spelt out the current economic situation in the country and conceded that the decision to reduce taxes by the government was “historic mistake”.

He said the decision not to float the rupee, delay in going to the IMF and failure to renegotiate the foreign debt had added to the bleak economic situation in the country.

Mr Sabry gave details of the appeals made from international lending agencies as well as other countries including India.

He disclosed that in addition US dollar one billion credit line just approved the government is seeking another US dollar 500 million from India.

The Minister said that appeals were also being made to the World Bank to increase its assistance.

He said it will take six months to enter into a programme with the iMF.

He said that a fresh budget for this year will be introduced shortly and that the taxes collected has  dropped to 8.6 per cent from 24 per cent earlier.

He also added that the country’s foreign reserves had now dropped to US dollars 50 million.