The National Economic Council (NEC) will review the current system of providing fertiliser subsidy to ease the burden of farmers, NEC Secretary-General and Chief Economist Prof. Lalith Samarakoon told the Sunday Observer.
The Council headed by President Maithripala Sirisena met for the first time after the Local Government election last week, to discuss issues pertaining to the economy and the problems of the people. The Council was set up by the President last year to take decisions to strengthen the economy.
The issue of fertiliser shortages was also discussed, and it was decided to set up a fool-proof mechanism by keeping a fertiliser buffer stock to face any shortage. Certain members of the Council held the view that going back to the old method of providing fertiliser at a subsidized rate directly to the farmers.
The shift from the conventional fertiliser subsidy mechanism to offer monetary allowances to farmers is seen as a major reason for the set back of the Unity Government at the recent polls by economic analysts.
NEC works with the Ministry of Agriculture to formulate a policy on fertiliser subsidy, fertiliser purchase and distribution system.
“The meeting focused on economic issues and problems faced by the people. All members recognised the urgent need to address the problems faced by the masses,” Prof. Samarakoon said.
He said concerns were raised particularly about high prices of food items leading to food inflation. Food price affects the cost of living. Recently, inflation was high due to the increase in food prices, including rice and coconut.
“The NEC will meet with the Consumer Affairs Authority, the Central Bank and other authorities to find out ways and means to slash the cost of living,” the Professor said.
He said the Council members emphasised the need to address critical infrastructure needs such as water, sewerage, power, and transport, capacity constraints and congestion at the Colombo Airport, commencing the Ratnapura highway and policy changes in the garments, tea, tourism and foreign employment sectors without which foreign direct investments cannot be attracted.
NEC was tasked to accelerate the national economic plan and present it in the next few weeks.
The 10-member Council chaired by the President comprises the Prime Minister, the Minister of Finance, Secretary to the President, Secretary to the Prime Minister, Secretary to the Cabinet, Governor of the Central Bank, Treasury Secretary, Secretary to the Ministry of National Policy and Economic Affairs and the Secretary-General of the Council.