UPFA ‘handout’ manifesto could cost over Rs. 400 bln to implement

The election manifesto of the United People’s Freedom Alliance (UPFA) with a host of ‘handouts’ to be given within 30 days of capturing power would cost the Treasury much more than the usual spend in a national budget.

A comprehensive analysis by some financial experts with national budgeting experience, considering the financial implications to any government, put down the cost of 20 of the main proposals at Rs. 404.2 billion, more than four times the total amount of Rs. 95.5 billion set for expenditure measures in the last 2015 interim budget. There were no revenue proposals given on how such funds would be raised.

According to the Revised 2015 Budget, total expenditure and net lending was Rs.2,990 billion of which recurrent expenditure was Rs.1,465 billion and capital expenditure and net lending was Rs.685 billion.

The analysts also looked at the UNP-led coalition and JVP manifestos but these didn’t have any figures. The UNP document was more related to long term economic and infrastructure-related development over a five year period which was incalculable in terms of numbers. Some of

Listed below are 20 key items picked by the analysts from the manifesto and the projected amounts (annually or as a one-off payment):

(1) Minimum basic wage increase of government servants to Rs. 25,000 = Rs. 32.50 billion. (2)Increase in cost of living allowance to Rs.10,000 = Rs.13 billion. (3)Interest free and low interest loans for women = Rs.3.5 billion. (4) Assistance for pregnant mothers, a bag of essential commodities and allowance of Rs.1500 = Rs.6.1 billion.

(5) Government’s dues for all contractors = Rs.15 billion.

(6) Free gas cooker and cylinder to all Samurdhi families + monthly allowance of Rs.350 for gas consumption = Rs. 11.17 billion. the UPFA proposals were included in previous budgets like the guaranteed price for paddy, tea, increase in salaries of public servants and cost of living, all of which this time had an increase of a certain percentage of what is currently offered. The manifesto was drafted by a

(7) Monthly allowance of Rs. 5000 to children who lost their mother/father or both parents = Rs.1.5 billion.

(8) Livelihood allowance of Rs.7,500 for families of those suffering from Chronic Kidney Disease = Rs.7 billion.

(9) Special welfare grant up to Rs. 5,000 for families where one parent or both is/are dead or suffering from serious disease and for families with children with special needs = Rs.1.7 billion.

(10) Monthly allowance of Rs. 5,000 for pre-school teachers = Rs. 250 million.

(11) Grant of Rs. 50,000 for youth in the age group of 18-25 for education in skills development = Rs.220 billion.

(12) Rs.10,000 each for all new university entrants to purchase books and educational material = Rs. 350 million.

(13) Increase the Mahapola scholar- team that included former Central Bank Governor Ajith Nivard Cabraal, former Securities and Exchange Commission Chairman Nalaka Godahewa, former Mass Media Ministry Secretary Charitha Herath and former State Mortgage and Investment Bank Chairman Jagath ship allowance to Rs.6,000 = Rs. 72 million.

(14) Allowance of Rs. 5 000 for all graduates who pass out from universities during internship in public or private sector institutions = Rs.150 million.

(15) Providing Rs 50 guaranteed price for paddy = Rs.7.5 billion.

(16) Fertilizer subsidy = lion.

(17) Guaranteed price for tea leaf = Rs.5 billion.

18) Guaranteed price for rubber = Rs.3.6 billion.

(19) Guaranteed price for liquid milk = Rs.3 billion.

(20) Reducing household water levy by 50 per cent in provincial council areas and 25 per cent in urban council areas = Rs.7.8 billion.

Rs. 65 bil- Wellawatte among others. The proposals are reminiscent of the subsidies’-strong budgets during the Mahinda Rajapaksa regime which came under criticism from economists and multilateral lending agencies owing to the rising debt component.