Citing the financial crisis in Sri Lanka, Kerala Finance Minister K N Balagopal on Sunday said that the Central government should correct its policies and added that states should be given Goods and Services Tax (GST) compensation and additional grants.
"Central government should look into the financial crisis of Sri Lanka which is happening due to international policies. The Indian government is also following the same and should correct its policies. States should be given GST compensation and additional grants," Balagopal told ANI.
"The price hike is a basic issue which we would be going to face in a big way. The cost of administration and cost of living will be increasing in every sphere, which will get very difficult for the state," said Balagopal.
Sri Lanka's economy has been in a free-fall since the COVID-19 pandemic due to the crash of the tourism sector. The country's foreign reserves have dried up and the country is facing a severe shortage of fuel and other essential commodities.
Sri Lanka's currency has devalued by almost SLR 90 against the US dollar since March 8, as the country's central bank attempts to stabilise the economy.
India provided more than USD 500 million in foreign currency swaps to strengthen Sri Lanka's foreign reserves, taking the total up to USD 900 million. India also extended the repayment time frame for the USD 500 million debt of Sri Lanka under the Asian Clearance Arbitration.
( With inputs from ANI )
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