Sri Lanka's new austerity measure: No government jobs

Sri Lanka Economic Crisis: Sri Lankan president Ranil Wickremesinghe brought a decision to reduce the retirement age from 65 to 60.

Sri Lanka began a fresh austerity drive under which there will be no government recruitment. In the island nations new taxes and higher electricity prices were started as the authorities aim to secure an IMF bailout, news agency AFP reported. As one of the preconditions to securing the $2.9 billion bailout from IMF is achieving debt sustainability, Sri Lanka has been bringing new changes after the country defaulted in April as its economy went into crisis.

Sri Lanka Economic Crisis: A Sri Lankan flag is waved by a protester.(AP File)

The IMF had earlier asked Sri Lanka to cut down on its 1.5 million strong government jobs, raise taxed and sell off state-owned enterprises. In December, a record 20,000 civil servants retired which was eight times than previous years, according to the public administration ministry.

This happened after Sri Lankan president Ranil Wickremesinghe brought a decision to reduce the retirement age from 65 to 60.

Almost double personal income and corporate taxes aimed at increasing state revenue kicked in, while electricity prices rose 65 percent, AFP reported. Ranil Wickremesinghe came to power after Gotabaya Rajapaksa fled the country and resigned in July following months of protests amid economic crisis in the country.

“Our problems have not been resolved yet. We need to reduce our debt burden if we are to move forward,” Ranil Wickremesinghe said.

Sri Lanka has also banned non-essential capital expenditure amid new measures owing to which officials who authorise investments over 500 million rupees without clearing them with the treasury first will be personally accountable for the same.