Ranil is ready to introduce a ‘Hal Poth’ system in the budget! A historical irony

In the 2022 Interim Budget to be presented by President Ranil Wickremesinghe on Tuesday, it is planned to include a food rationing system covering essential items such as rice, wheat flour, and lentils (dhal) to strengthen nutritional support for the poor.

During the 1970-77 government period, this kind of rationing system was also known by various names such as the ‘hal poth’ system. In the late seventies, Ranil’s uncle J.R. Jayewardene came to power promising to end this kind of system and introduced the open economy. During this period, theft, fraud, and state terrorism increased during the J.R. Jayewardene era. Gradually, underlings took over the government, the law became unequal, and debt piled up.

Now the son-in-law must introduce this ‘hal poth’ system again, a historical irony.

Nevertheless, this time the rationing and subsidy systems are subject to the recommendations given by the International Monetary Fund. The purpose of these proposals is to provide a little relief to the people negatively affected by economic reforms implemented by Ranil Wickremesinghe.

This interim budget is critical to Sri Lanka’s recovery from the current economic crisis and social instability caused by food, fuel, and energy shortages.

As another step, the agricultural loans of farmers who have less than two hectares of land will be written off, and those who are renting government-owned urban houses will be given home ownership based on that rent. Relief programs including subsidy schemes for the poorest people, and a social safety net for farmers and fishermen are to be included in this budget.

The interim budget focuses on revenue and expenditure for the next 4 months from September 2022. Its main purpose is to reduce government expenditure and increase government revenue based on the agreements reached with the IMF. It may include many proposals, from increasing utility prices to monetizing public services by selling them to the private sector. Whether it is included in the interim budget or not, there are plans to reduce the public service and carry out many more drastic reforms.

People will have to go through a very difficult time with no money for interim financing until Sri Lanka gets money from the IMF. All the relief proposals mentioned above may not be enough to improve the difficult times people are facing.