Budget 2017: Govt has increased welfare spending - Ravi K.

The government has actually increased subsidies and welfare payments in its 2017 Budget, contrary to Opposition allegations of spending cuts, with the fertilizer subsidy given for paddy being extended to tea, rubber and coconut, and a new scheme to support domestic milk powder manufacturers, Finance Minister Ravi Karunanayake said.

The Finance Ministry has set up a Welfare Beneficiary Board to ensure that the subsidies and welfare payments are being given to the needy and actual beneficiaries without being duplicated, it said in a statement.

“This particular board has been preparing a data base incorporating the particulars of the beneficiaries of all kinds of subsidies and welfare payments,” it said.

The Finance Minister said that, despite huge allocations for development projects, government welfare spending has been increased by 55% to Rs. 403 billion in the 2017 Budget, an increase of Rs.143 billion when compared with Rs.260 billion allocated in 2014, the final year of the former regime. “The present government, increased the Samurdhi allowance in 2015 as it pledged,” the Finance Ministry statement said.

The allocation to pay the Samurdhi allowances has been increased to Rs. 44 billion in 2017 from Rs.15 billion in 2014. “The minimum Samurdhi allowance paid in 2014 was Rs. 210 and the maximum was Rs.1,500. It has been increased to a minimum payment of Rs. 420 and a maximum payment of Rs. 3,500.”

As the President has declared 2017 as the year of poverty eradication, the fertilizer subsidy that has been granted for paddy has been extended to cover tea, rubber and coconut from next year to uplift the agricultural economy, with an additional Rs.1, 500 million being allocated for this purpose in the 2017 Budget, the Finance Ministry said.

“At the same time, a new subsidy scheme has been introduced from 2017, with the allocation of another Rs.450 million to give a subsidy for domestic milk powder manufacturers as part of making the country self sufficient in milk.”

The Finance Ministry statement stressed that no subsidy or other welfare facility that was increased after this government came to power has been slashed or removed.

“After the Finance Minister presented Budget 2017 in Parliament on November 10, the Finance Ministry has observed that certain politicians who partake  ... in post-budget discussions and debates on audio and visual media and at press conferences make baseless allegations to portray that the current government has cut back public subsidies and welfare payments. None of the allocations already made available for subsidies on fertilizer, Samurdhi and school uniforms has been reduced, the Finance Ministry said, noting that the payment for school uniforms is now being distributed to students at schools without any problem.

Replacing the selling of fertilizer at a subsidized price and school uniforms to students with cash payments has not only brought the advantage of bringing down the use of chemical fertilizer but also streamlined the process, improving efficiency and eliminating middlemen, which has reduced the cost incurred on fertilizer and school uniforms, the Finance Ministry said.

“The special interest rate paid for the first Rs.1.5 million fixed deposit by senior citizens and Rs.2000 monthly payment for needy senior citizens introduced in 2015 after this government came to power has not been reduced or removed as certain opposition politicians try to mislead the people,” it also said.

“This government, for the first time in history, started to pay a higher interest rate for the deposits of senior citizens in saving accounts in 2015. Rs.1, 450 million and Rs. 4,000 million were allocated for this purpose by Budget 2015 and Budget 2016 respectively. It has been reported that expecting higher dividends, more and more retired senior citizens have deposited their pension funds in commercial banks.” To meet this increased demand the Treasury has allocated Rs. 8,000 million for 2017. The Rs. 20,000 being paid for expectant mothers for a ‘Poshana Malla’ over a period of 10 months is also being distributed without any curtailment. 

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