Salary hike nullified by devaluation, inflation – Wickremeratne

November 21, 2011, 10:41 pm ,The Island,

by Zacki Jabbar

The Mahinda Rajapaksa government’s 2012 budget had true to form bluffed the working class, once again, by devaluing the rupee and then granting a 10 percent salary increase to public servants, UNP MP Eran Wickremeratne said yesterday.

He told The Island that with inflation officially at six percent, though it was much higher and the rupee devalued by three percent, there had in effect been no salary hike and could possibly work out to a deduction in wages.

Asked about his overall perception of the 2012 budget which was presented by President Mahinda Rajapaksa, in his capacity as Finance Minister, amidst fisticuffs in parliament yesterday, Wickremeratne said that it was inflationary and the rupee devaluation would make imports cost higher, resulting in the common man being strangled further.

He noted that deficit financing was the underlying theme of the 2012 budget and with the unofficial inflation figure much higher than the official position, the cost of living was bound to rise further.

The Revival of Underperforming Enterprises and Underutilised Assets, was the most obnoxious piece of legislation to be passed in recent times, Wickremeratne said adding that its presentation in parliament as an ‘Urgent Bill’ had prevented any public debate.

He said that the Act was being used to take over lands of privatized companies, in direct violation of the agreement’s they had entered into with the State. At a time when local and foreign investments should be encouraged, the wrong signals being sent out were detrimental to economic development, Wickremeratne observed.