Expected Amendment to Parate Law in Next Parliament Session

Dr. Wijeyadasa Rajapakshe, the Minister of Justice, Prisons Affairs, and Constitutional Reforms, shared plans to introduce an amendment regarding the temporary suspension of Parate execution, indicating its upcoming presentation to Parliament. This proposed legislative change demonstrates a proactive approach towards addressing legal matters crucial for the country’s governance and justice system.

Furthermore, Minister Rajapakshe emphasized the intention to implement a specific loan scheme designed for Small and Midsize Enterprises (SMEs). This initiative aims to strengthen the economic prospects of smaller businesses, contributing to overall economic resilience and growth.

Minister Rajapakshe made these announcements during a press briefing at the Presidential Media Centre, focused on the important theme of ‘Collective Path to a Stable Country.’ Through this platform, he highlights the government’s unwavering commitment to advancing legal reforms and supporting SMEs, reaffirming its dedication to national progress and prosperity.

Speaking at the media briefing, Dr. Wijeyadasa Rajapakshe further stated;

A nation’s fiscal policy is crucial for its economic strength. The central bank plays a significant role in shaping this policy landscape. When discussing Parate execution in Sri Lanka, it is clear that the central bank has primarily focused on safeguarding the stability of financial institutions. However, concerns have been raised about whether enough attention has been given to the country’s overall financial position, especially with declines in the agricultural sector from 22% to 8% and the industrial sector from 38% to 32%.

Despite borrowing from the International Monetary Fund (IMF) on 17 occasions, the economy has struggled to recover. The service sector has continuously expanded at the expense of neglecting the industrial sector, leading to reduced production capacity. This imbalance has hindered the nation’s economic recovery and overall growth trajectory.

The substantial amount of loans provided by two state banks, totaling around Rs. 602 billion, poses a significant challenge. A large portion of this amount is expected to be written off as bad debt due to non-payment. If these funds had been directed towards agriculture and industry, significant growth could have been achieved. This situation emphasizes the need for strict financial controls in the country to ensure optimal resource utilization and sustainable economic development.

To prevent crises for businesses and financial institutions, proactive measures are essential. Therefore, plans are in place to propose amendments to Parliament regarding Parate execution to address these issues. Additionally, a separate loan scheme tailored for Small and Midsize Enterprises (SMEs) is being considered, with President Ranil Wickremesinghe supporting this initiative.

Moreover, the government aims to implement a low-interest loan program for SMEs in collaboration with key financial institutions such as the World Bank and the Asian Development Bank. Recognizing the importance of responsible lending, discussions with the Cabinet have led to the decision to establish a monitoring system for credit facilities. Further discussions with the Ministry of Finance are expected to refine these strategies.