Sri Lanka's new austerity drive: No government jobs

In a recent austerity drive on Monday, Sri Lanka froze the hiring for government jobs following a swell in taxes and electricity prices. The upsurge came as the administration attempted to secure financial escape from International Monetary Fund (IMF).

However, to secure the IMF bailout of $2.9 billion from the Washington-based creditor, Sri Lanka needs to achieve debt sustainability as the nation's economy has been in crisis since April.

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Amid new measures, the Sri Lankan government has also banned non-essential capital expenditure. Officials need to authorise investments of over $6 million with the treasury.

Official data from Sri Lanka's public administration ministry said that 20,000 civil servants retired in December after President Ranil Wickremesinghe lowered the retirement age from 65 to 60. Thus, the new numbers were eight times more than usual.

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New Year's day for the south Asia island nation came with corporate taxes to increase the state revenue. Electricity prices have gone up 65% after a 75% tariff increase in August.

After former President Gotabaya Rajapaksa fled the country and resigned amid the economic crisis, Wickremesinghe came to power. Despite improvements in Sri Lanka's situation following the restoration of food, fuel, and fertiliser supplies, the current President said the crisis was not over. "We need to reduce our debt burden if we are to move forward," said Wickremesinghe.

Key lenders, including China and India, have not yet announced a cut on their loans.

(With inputs from agencies)

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