India Continues to Help Debt-Stricken Sri Lanka by Distributing Ration in Kalmunai
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India became Sri Lanka’s first creditor to formally assure the IMF (International Monetary Fund) of helping the debt-crisis-affected nation with its debt restructuring program. Under the ‘Neighbourhood First’ policy, India like always had stepped ahead to aid Sri Lanka in a recent incident where New Delhi, the Indian High Commission was seen distributing ration in Kalmunai. The dry food packets certainly are a respite for several residents of the financially-burdened country.
After the Covid-19 pandemic, Sri Lanka’s economy was affected heavily as its tourism sector crumbled, which is the nation’s primary source of revenue generation. Due to the financial crisis and halt in tourism, the remittances from citizens employed abroad also dwindled. In April, the cash-strapped nation in its history since gaining independence in 1948 from Britain for the first time declared that is it debt-ridden and defaulting on debt, leading to a shortage in forex and at-large public protests.
Because of the steady rise in inflation after the war in Ukraine, the import prices, especially for fuel increased exponentially. India offered assistance in this situation to the debt-ridden nation. On 20 March, the Executive Board of IMF is scheduled for a meeting to weigh the request by Sri Lanka for a bailout. The High Commission of India in Columbo wrote on Twitter about supporting Sri Lanka and shared a glimpse of the distribution of ration in Kalmunai.
In case the consideration is accepted, they will release the first tranche of the facility soon. Ranil Wickremesinghe, the Sri Lanka President assures fair debt restructuring to its credits and transparency to official bilateral creditors of the nation. He also promised equitable burden-sharing of the restructured debt and equal treatment to its creditors in order to resolve the economic crisis of the country.
The President also said that the central bank and finance minister will discuss and set the target to introduce inflation target as well as control inflation. The country will gradually also raise funds by setting up a unique entity to remove the responsibility of settling the sovereign debt from the central bank. All these conditions are going to be a part of the new legislation once it is passed.
