Sri Lanka’s inflation, based on the National Consumer Price Index (NCPI), for January 2024 was recorded at 6.5 per cent, Year-on-Year (YoY), the Department of Census and Statistics (DCS) revealed in its latest report published on Wednesday (21). This is an increase of 4.2 per cent compared to the headline inflation recorded in December 2023.
Compared to December, the reported inflation for January was mainly due to the higher prices in both food and non-food groups, according to the DCS report.
On a monthly basis, the YoY inflation of the food group went up to 4.1 per cent in January from 1.6 per cent in December. The YoY inflation of the non-food group meanwhile increased to 8.5 per cent in January from 6.3 per cent in December.
The contributions (YoY) to the inflation recorded in January from the food group and non-food group stood at 1.86 per cent and 4.66 per cent, respectively, in comparison to December.
Even in the absence of official data, the increased cost of living is felt by every ordinary citizen of this country except a privileged few. January has been difficult and February worse, with prices of everything soaring and income remaining stagnant, or, in some cases, reducing, making purchasing power even weaker.
Meanwhile, the new school year started a few days ago. Parents of an average family struggle to supply their children with the basics as the price of everything has doubled. For instance, school supplies for a Grade 1 student, including a lunchbox, small school bag, a water bottle, coloured papers, varnish papers, bristle boards, crayons and pencils which cost around Rs 8,000 last year has doubled this time. The items on the book list alone cost over Rs 15,000 this year.
Yet, as they are common citizens, they must grin and bear and tighten their belts even further. Meanwhile, the Central Bank of Sri Lanka (CBSL) as the apex financial institution in Sri Lanka that seeks to achieve and maintain a healthy and stable economic and financial system while maximising resource utilisation and maintain domestic price stability has instead gone for a massive salary increase while others are pushed to the wall by its miscalculations and flawed policies that led to a major economic recession.
The controversial salary hike even raised eyebrows at the Diyawannawa August Assembly. Members of both the Government and the Opposition were up in arms about the recent salary hike granted to CBSL employees.
The recent controversy was over the alleged 70 per cent salary increase of CBSL employees.
Chief Opposition Whip Lakshman Kiriella stated in Parliament that officers of the Central Bank, who allegedly led the country to bankruptcy, have been given a 70 per cent salary increase.
He queried whether such an action was justified while advising the people to tighten their belts and other institutions to reduce staff. The MP said the salary of a Deputy Governor of the Central Bank has been increased by over Rs 700,000 and noted that the salary of an office assistant at the Central Bank has been increased by Rs 75,000.
Minister Nimal Siripala de Silva said Parliament should be given the right to decide on salary increments of CBSL officials.
“Parliament should approve any salary hikes for Central Bank officials as it is the Legislature that has the power over finances. Let us bring in such a law,” he said.
“Do office assistants of the Central Bank perform any special role to become entitled to an exorbitant salary,” he asked in response to the salary hike given to Central Bank office assistants.
It was insisted that while the Central Bank has independence, it does not mean it could bypass Parliament; any changes in salaries require parliamentary sanction.
In response, State Minister of Finance Ranjith Siyambalapitiya clarified in Parliament that the increase in salaries at the Central Bank cannot be controlled by the Ministry of Finance.
According to their agreement, salaries are increased every three years and the decision lies with the Central Bank’s governing body, the State Minister explained.
He added that considering the current circumstances, it would be preferable if they could work with a minimum wage, highlighting that high salaries are common in central banks worldwide due to their need for top economic experts.
Siyambalapitiya stressed the importance of making special provisions for non-replaceable positions and said salaries at the Central Bank are paid from the consolidated fund, not from their account.
While the powerful and influential keep bargaining for their already high salaries to be increased further, a majority of citizens – who have literally become beggars – are compelled to carefully prioritise basics with meagre salaries, as they no longer have a say in the matter. And, demanding the Government to reduce the price of ‘gal arrakku’ or special arrack is certainly not a priority!