Advocata commends Govt.’s targeted support in purchasing school stationery for vulnerable families

Originally appeared in the Daily FT

Urges Govt. to consider similar targeted interventions over VAT exemptions on various goods and services

The Advocata Institute has applauded the recent policy action by the Government to provide a cash transfer of Rs. 6,000 to school children from vulnerable groups to assist them in purchasing school stationery for the upcoming 2025 academic year.

“This policy move reflects a thoughtful and impactful approach to addressing pressing social challenges without compromising Sri Lanka’s fiscal sustainability,” Advocata said in a statement.

The proposed cash transfer program through the Ministry of Education and the Welfare Benefits Board stands out as a more equitable alternative compared to measures such as reducing or exempting value-added tax (VAT) on school books and stationery. While VAT exemptions on education materials might seem appealing, they are not targeted and hence can disproportionately benefit high-income households. High-income households, with greater purchasing power are more likely to purchase larger quantities or more expensive educational materials, amplifying their benefit from such exemptions. In contrast, vulnerable groups, including low-income households, often prioritise essentials such as food, housing, and healthcare, leaving little capacity to purchase additional educational materials even with reduced tax rates.

Advocata said VAT exemptions or reductions, which lower the cost of selected items can also create distortionary effects on market prices by altering consumer behaviour. It can reduce demand for close substitutes that are not exempt, making it harder for businesses offering these alternatives to compete, creating inefficiencies in the market. Additionally, businesses may not always pass on the benefit of VAT removal to customers, choosing to keep the added margin to themselves. Targeted cash transfers, however, ensure that resources are allocated efficiently and directly to those who need them most, empowering vulnerable families to meet their specific educational needs without unintended market disruptions.

Advocata also opined that Sri Lanka’s economic crisis increased the cost of education material. A survey on the household impact of the economic crisis in 2023 conducted by the Department of Census and Statistics revealed that a large number of school children in rural and estate regions have faced significant setbacks in their education owing to the economic crisis, where 53.2% of affected children have reduced or stopped purchasing school stationary, while 26.1% have resorted to reusing old stationery. In light of this, the cash transfer to purchase education material will provide immediate relief to those struggling to meet their children’s immediate education needs, which can otherwise be a barrier to school attendance and performance.

Thus, it will help address socioeconomic disparities without disrupting the Government’s revenue flow to maintain essential public services, especially in light of the IMF’s stabilisation program’s requirements for the authorities to raise the tax to GDP ratio to 14% by 2026. Given that access to education is a fundamental right, the cash transfer will help ensure that no child is left behind due to financial difficulties.

With the exception of essential items like food, the Advocata Institute urges the Government to consider similar targeted interventions over VAT exemptions on various goods and services. Direct cash transfers effectively mitigate the regressive impact of VAT by directing assistance to those most in need, allowing them the flexibility to allocate funds according to their specific circumstances and priorities.

New era of hope and responsibility

By Dhananath Fernando

Originally appeared in the Daily FT

The resounding victory of the National People’s Power (NPP) marks the beginning of a new chapter in Sri Lanka’s history. For decades, citizens have watched as promises made by the political elite faded into disappointment. This election is a clear message: the people demand change. With 159 seats in Parliament and a two-thirds majority, the NPP has been given an unparalleled mandate to deliver a Government that is clean, transparent, and accountable.

The NPP’s historic Parliamentary victory was made possible by a significant swing in voting after the Presidential election. While the NPP candidate secured only 42.31% of the vote in the Presidential race, this surged to 61.56% in the Parliamentary election. A key factor behind this shift was growing public confidence in the NPP’s ability to stabilise the economy, continuation of debt restructuring and continue the reforms initiated under the IMF program. For a country emerging from a severe economic crisis, maintaining this momentum is crucial. Economic recovery requires sustained reforms, fiscal discipline, and a commitment to fostering growth while protecting the most vulnerable. The NPP now has both the mandate and the responsibility to prioritise these efforts, ensuring that Sri Lanka’s hard-won stability leads to long-term prosperity.

Government that serves its people rather than itself

This victory is more than just a win for the NPP. It is a victory for values that people have come to associate with the NPP; of honesty and of a Government that serves its people rather than itself. The old political culture, rife with corruption and cronyism, has been decisively rejected.

While the NPP now has the authority to make sweeping changes, it also carries a heavy obligation: to ensure that this power is not abused. History shows us that unchecked power, no matter how well-intentioned, can lead to dangerous consequences. This is why the principle of separation of powers is so important.

The separation of powers means that no single branch of Government—whether the President, the Parliament, or the Judiciary—should have unchecked authority. Each branch should act as a check on the other, ensuring that decisions are made with careful thought and accountability. Unfortunately, Sri Lanka’s Constitution places extraordinary power in the hands of the President, disrupting this balance. A two-thirds majority in Parliament further concentrates power, making it even more critical to establish safeguards.

As James Madison, one of the great thinkers behind modern democracy, once said: “If men were angels, no government would be necessary. If angels governed men, no checks would be needed. But because governments are made up of people, we must create systems that control the government itself.”

This wisdom reminds us that even the best leaders are human. Without proper restraints, even well-meaning governments can falter. Checks and balances between the executive and the legislature, an independent judiciary and the active participation of civil society are all essential to ensure that power is used wisely.

Opportunity to rewrite the rules of Sri Lanka’s political game

The foundation of the separation of powers is found within the constitution. The NPP has a golden opportunity to rewrite the rules of Sri Lanka’s political game to ensure accountability and justice for generations to come. This means not merely abolishing the Presidency but a new constitution based on Westminster principles that restores the balance between the executive, legislature and the judiciary. This is what the call for “system change”, embodies; not merely a change in the personalities in power but a fundamental change in the way politics is done.

Persson, Roland and Tabellini point out that “Political constitutions are incomplete contracts and therefore leave room for abuse of power. In democracies, elections are the primary mechanism for disciplining public officials, but they are not sufficient. Separation of powers between executive and legislative bodies also helps to prevent the abuse of power, but only with appropriate checks and balances. Checks and balances work by creating a conflict of interest between the executive and the legislature, yet requiring both bodies to agree on public policy. In this way, the two bodies discipline each other to the voters’ advantage. Under appropriate checks and balances, separation of powers also helps the voters elicit information.”

This moment is not just about the NPP; it is about us, the people. As citizens, we must remain vigilant, engaged, and vocal. A true democracy requires not only strong leaders but also an active and informed population. Together, we can build a Sri Lanka that lives up to the ideals of justice, equality, and freedom.

Let us celebrate this victory with hope but also with a clear understanding of the work ahead. The NPP has promised a new political culture. Now is the time to make it a reality—one rooted in accountability, justice and the enduring principle that no one is above the law.

Advocata Institute congratulates President Anura Kumara Dissanayake

Originally appeared in the Daily FT

The Advocata Institute has extended its heartfelt congratulations to President Anura Kumara Dissanayake on his election as the ninth Executive President of the Democratic Socialist Republic of Sri Lanka.

In a message addressed to the President, Advocata Institute Chairman Murtaza Jafferjee and CEO Dhananath Fernando acknowledged the trust and confidence placed in President Dissanayake by the people of Sri Lanka.

They expressed optimism that his leadership will guide the country towards a more prosperous and equitable future.

“As an independent policy think tank committed to advancing economic freedoms and improving the well-being of Sri Lankans through economic prosperity, we believe your tenure offers a unique opportunity to pursue meaningful reforms that will continue economic stability, promote sustainable growth, enhance governance, and uplift the living standards of all citizens,” Jafferjee said.

The Advocata Institute also emphasised its readiness to support the new administration with its expertise in economic research and public policy, highlighting the power of evidence-based policymaking in driving positive change.

“We look forward to collaborating with your Government on initiatives that foster an open and thriving economy,” said Fernando, expressing the organisation’s commitment to the principles of economic freedom and innovation as drivers of national prosperity.

THE STATE OF STATE ENTERPRISES IN SRI LANKA – 2022

As a group, these SOEs have suffered large losses that have contributed to the present macroeconomic problems facing the country. The state has to make good on these losses, increasing public deficits that have to be financed by borrowing from the Central Bank, has exacerbated this issue further, which has brought high inflationary pressures into the economy. Losses of these enterprises contribute to macroeconomic instability given the perilous state of our overall finances. The Ceylon Petroleum Corporation, Ceylon Electricity Board and SriLankan Airlines need immediate reform or sale to a private party to arrest the growing magnitude of this problem. Previous attempts to address this problem have attracted controversy. Our general population is not prepared to allow disposal of enterprises despite their record of making large losses year after year. Apart from the macroeconomic problem, the country has a large productivity and efficiency problem that requires more resources to keep growing even at the same rate given that productivity and efficiency issues have not been addressed adequately.

Advocata's 2022 Report "State of State Owned Enterprises 2022 " is a deep dive on the impact of State Owned Enterprises, on Sri Lanka's economy.

Advocata SOE Reform Roadmap : Getting the State Out of Business: The Compelling Case for Privatisation of State-Owned Businesses

Sri Lanka's state-owned enterprises (SOEs) are a major hindrance to the country’s economic prosperity. The state's footprints extend across all major industries - telecommunications, banking, ports, petroleum, and power generation. With over 400 SOEs spread across 33 sectors and employing roughly 250,000 workers, they form an inefficient, bloated bureaucracy. The IMF's Governance Diagnostic Assessment flags SOEs as being high-risk for corruption, plagued by weak management, shoddy oversight, rigged procurement processes, political interference, and a lack of transparency. Sri Lanka cannot afford the status quo. Decisive action to privatise SOEs is essential to break free from the cycle of inefficiency and corruption, and unlock sustainable economic growth.

Here is the link to the Advocata SOE Reform Roadmap in English on

Getting the State Out of Business: The Compelling Case for Privatisation of State-Owned Businesses

Here is the link to the Advocata SOE Reform Roadmap in Sinhala

Here is the link to the Advocata SOE Reform Roadmap in Tamil

Dr Franziska Ohnsorge on Advocata Conversations | Ep.11| Murtaza Jafferjee | Dr Franziska Ohnsorge

We are back with our 11th episode of Advocata Conversations!

This is a series of discussions, where we converse with esteemed industry leaders on policy and economy! With Advocata Conversations we aim to capture insights from experienced policymakers on policy reforms and their impact.

Our 11th episode is between Dr Franziska Ohnsorge ,Chief Economist at South Asia World Bank. She has been responsible for leading research programs on key economic issues in South Asia along with informing policy debates and World Bank lending. Prior to joining the World Bank, Franziska Ohnsorge worked in the Office of the Chief Economist of the European Bank for Reconstruction and Development and at the International Monetary Fund.

This conversation converses between Dr .Franziska and the Chair of Advocata, Murtaza Jafferjee.

The conversation focuses on the Title -South Asia Development Update 2024

Dr Franziska Ohnsorge in this conversation discusses about launching the South Asia development semi annual report that the World Bank produces on the growth Outlook of the region, further focusing on occupying policy makers. She pertains to describe this year’s report mainly involves on two things ; climate adaptation and creating more jobs in the market.

Media Coverage on Tax Free Periods: Call for the Removal of Taxes on Menstrual Products

Putting the period on ‘taxing’ the period

The imposition of taxes on menstrual hygiene products, needed by women and girls due to a biological process naturally occurring in their body, has been subjected to fair criticism from many parties. While there have been great demands for the Government to remove the taxes imposed on menstrual products and the raw materials needed to manufacture such, such items are currently subjected to a tax rate of 51.07%, and it continues to restrict the access of those menstruating to sanitary products.
Read the full article here

Half number of girls, women do not include sanitary napkins in household expenditures

Due to the affordability of sanitary napkins half the number of girls and women in Sri Lanka do not include sanitary napkins in their household expenditures, the Advocata Institute said. They said the affordability of sanitary napkins and its significant impact on the welfare of girls and women in Sri Lanka has become more pronounced in recent years. This is particularly evident due to the decline in their purchasing powers stemming from the Covid-19 pandemic and the economic crisis. .

Read the full article here

Ep 3 | Moving The Needle On Gender Parity | WPAN | Nirmali Ameresekere | Dinali Peiris

Welcome back to another episode of the WPAN podcast discussion series!

The Women's Policy Action Network is hosting its latest podcast discussion series, facilitated by the Advocata Institute, supported by the Kingdom of Netherlands. This discussion series delve into crucial topics including empowering women in the labor force via policy adjustments and labor laws, enhancing digital infrastructure, and advocating for social reform in Sri Lanka.

This episode features Nirmali Ameresekere (Researcher, Advocata Institute) and Dinali Peiris (Director - Group Human Resources, MAS Holdings). They discussed about the Women Go Beyond program at MAS, and its significant contributions to empowering women locally and globally. The discussion addresses garment worker rights and the importance of parental leave which includes both parental and maternal leave, for working women.

Media Coverage on A Deep Dive into the Market Competitiveness of Ceylon Tea

Advocata Institute unveils insights on enhancing market competitiveness of Ceylon tea

Advocata Institute Research Consultant Sudaraka Ariyarathna shed light on the discrepancy between recommended replanting rate and the actual rate, mentioning that “while the recommended replanting rate stands at 2.5%, our research indicates a significantly lower actual rate,” highlighting the impact on Sri Lanka’s tea production yields compared to other black tea producing nations. This was the opening to “A deep dive into the market competitiveness of Ceylon tea” organised by Advocata Institute which was on 29 February.
Read the full article here

Importance of strengthening estate workers’ economy stressed

The challenges encountered by the upcountry Tamil community is beyond mere daily wages, said Minister of Water Supply and Estate Infrastructure Development, Jeevan Thondaman.

He was speaking at a discussion on “A Deep Dive into the market competitiveness of Ceylon Tea” organised by Advocata Institute at the BMICH on Thursday.

He stressed the importance of enhancing their quality of life by addressing various facets such as housing, land, education, health, and infrastructure.

Read the full article here

ADVOCATA INSTITUTE

Unveils Insights on Enhancing Market Competitiveness of Ceylon Tea

The Ceylon tea industry faces significant challenges which threaten its competitiveness and sustainability in the global market. High labour costs, labour shortages, and inefficiencies in land management are hindering productivity and profitability, while issues pertaining to quality control and the lack of a premiumisation strategy posse further obstacles to unlocking the true potential of Ceylon tea.

Read the full article here

Optimism over securing EU protection for Ceylon Tea

Sri Lanka expressed optimism about securing European Union(EU) protection for Ceylon tea within the next 12-18 months.

Chairman of the Tea Board, Niraj De Mel, emphasised the need to prioritise quality over volume, advocating for a return to basics to improve prices.

Read the full article here

Ep 2 | Empowering Women in E- Commerce| WPAN | Akhila Randeniya | Anishka De Zylva

Welcome back to another episode of the WPAN podcast discussion series!

The Women's Policy Action Network is hosting its latest podcast discussion series, facilitated by the Advocata Institute, supported by the Kingdom of Netherlands. This discussion series delve into crucial topics including empowering women in the labor force via policy adjustments and labor laws, enhancing digital infrastructure, and advocating for social reform in Sri Lanka.

In this episode Akhila Randeniya (Research Analyst, Advocata Institute) and Anishka De Zylva (Head of Corporate Affairs, Public Policy & ESG at Daraz). They discuss Sri Lanka's ecommerce growth hindered by slow adoption of digital payments and limited logistics connections. The discussion also addresses Sri Lanka's ecommerce growth hindered by slow adoption of digital payments and limited logistics connections.

Women's Policy Action Network Podcast Series

Welcome to the WPAN Podcast Series!

The Women's Policy Action Network is hosting its latest podcast discussion series, facilitated by the Advocata Institute, supported by the Kingdom of Netherlands. This discussion series delve into crucial topics including empowering women in the labor force via policy adjustments and labor laws, enhancing digital infrastructure, and advocating for social reform in Sri Lanka.

This is our introductory episode where Thathsarani Siriwardana and Akhila Randeniya introduce the series by discussing the events hosted by WPAN and also the launches of the policy brief. They also give insights to the discussions for future podcast episodes.

Check out our first episode where Thathsarani Siriwardana and Isuru Gunasekera give insights on parental leave policies in Sri Lanka. They also touch upon such topics that include implementing parental leave policy in a large organization and childcare outsourcing and maternity benefits in the private sector.

Sir Roger Owen Douglas on Advocata Conversations | Ep.10 | Murtaza Jafferjee | Sir Roger Douglas

We are back with our tenth episode of 'Advocata Conversations!'

This is a series of discussions, where we converse with esteemed industry leaders on policy and economy! With Advocata Conversations we aim to capture insights from experienced policymakers on policy reforms and their impact. This episode is between Sir Roger Owen Douglas, Former Minister of Finance, New Zealand and the Chair of Advocata, Murtaza Jafferjee. In this conversation Sir Roger speaks about his political leadership, policy-making, and legacy. He also discusses the political and economic reforms in New Zealand and addresses tax reforms and the importance of transparency.

Check out our previous episode with Prof Chin-Huat Wong, Deputy Head (Strategy) UN Sustainable Development Solutions Network (SDSN) Asia Headquarters, Sunway University

South Asia Economic Outlook: World Bank | Infrastructure Challenges & Economic Growth | Murtaza Jafferjee | Maurizio Bussolo

In this episode of Advocata Studio, Advocata Chair, Murtaza Jafferjee is joined by Maurizio Bussolo, (Lead Economist, Chief Economist Office for South Asia, The World Bank). In this video he discusses with Murtaza Jafferjee on trade, gender inequality, and economic growth in South Asia, and its impact on productivity. He also addresses the South Asia's economic growth and infrastructure challenges.

Watch the full discussion here:

Maurizio Bussolo, (Lead Economist, Chief Economist Office for South Asia, The World Bank) also presents a report on South Asia's economic outlook, highlighting slowing growth and challenges such as weak private investment and fiscal position.

The presentation by Maurizio on South Asia Development Update: Toward faster, Cleaner Growth can be accessed here

IMF in Sri Lanka: Supporting Governance Reforms | Murtaza Jafferjee | Peter Breuer | Joel Turkewitz

In this episode of Advocata Studio, Advocata Chair, Murtaza Jafferjee is joined by representatives from the International Monetary Fund, Peter Breuer (Senior Mission Chief for Sri Lanka, International Monetary Fund) & Joel Turkewitz (Deputy Division Chief in the Legal Department, International Monetary Fund)

The Sri Lanka Technical Assistance Report - Governance Diagnostic Assessment can be accessed here.

Prof Chin-Huat Wong on Advocata Conversations | Ep.09 | Murtaza Jafferjee | Prof Chin-Huat Wong

We are back with our ninth episode of 'Advocata Conversations!'

This is a series of discussions, where we converse with esteemed industry leaders on policy and economy! With Advocata Conversations we aim to capture insights from experienced policymakers on policy reforms and their impact. Our ninth episode is between Prof Chin-Huat Wong, Deputy Head (Strategy) UN Sustainable Development Solutions Network (SDSN) Asia Headquarters, Sunway University and the Chair of Advocata, Murtaza Jafferjee. He has been a keen observer of Malaysian politics for more than 25 years, and was active in the civil society-based Coalition for Free and Fair Elections (Bersih) for 17 years after his recent retired.

Check out our previous episode with Iain Rennie, Managing Director of Iain Rennie Consulting and the Former State Services Commissioner of New Zealand

Iain Rennie on Advocata Conversations | Ep.08 | Murtaza Jafferjee | Iain RennieI

We are back with our eight episode of 'Advocata Conversations!'

This is a series of discussions, where we converse with esteemed industry leaders on policy and economy! With Advocata Conversations we aim to capture insights from experienced policymakers on policy reforms and their impact. Our eight episode is between Iain Rennie, Managing Director of Iain Rennie Consulting and the Former State Services Commissioner of New Zealand and the Chair of Advocata, Murtaza Jafferjee.

Check out our previous episode with Dr Irvin Studin, founder, editor-in-chief, publisher of Global Brief magazine, & the president of The Institute for 21st Century Questions, a leading Canadian think tank

Dr Irvin Studin on Advocata Conversations | Ep.07 | Murtaza Jafferjee | Dr Irvin Studin

We are back with our seventh episode of 'Advocata Conversations!'

This is a series of discussions, where we converse with esteemed industry leaders on policy and economy! With Advocata Conversations we aim to capture insights from experienced policymakers on policy reforms and their impact. Our seventh episode is between Dr Irvin Studin, founder, editor-in-chief, publisher of Global Brief magazine, & the president of The Institute for 21st Century Questions, a leading Canadian think tank and the Chair of Advocata, Murtaza Jafferjee.

Note that this is the audio of the conversation between Murtaza & Dr Studin.

Check out our previous episode with Dr Swarnim Waglé, an Elected Member of Federal Parliament of Nepal and former Chief Economic Advisor at the UNDP Regional Bureau for Asia and the Pacific (RBAP) in New York

Dr Swarnim Waglé on Advocata Conversations | Ep.06 | Murtaza Jafferjee | Dr Swarnim Waglé

We are back with our sixth episode of 'Advocata Conversations!'

This is a series of discussions, where we converse with esteemed industry leaders on policy and economy! With Advocata Conversations we aim to capture insights from experienced policymakers on policy reforms and their impact.

Our sixth episode is between Dr Swarnim Waglé, an Elected Member of Federal Parliament of Nepal and former Chief Economic Advisor at the UNDP Regional Bureau for Asia and the Pacific (RBAP) in New York and the Chair of Advocata, Murtaza Jafferjee. Dr Swarnim Waglé discusses his journey from joining the The World Bank and the UNDP in Asia and the Pacific in New York to becoming an elected Member of Federal Parliament in Nepal. He also further explores on the economic developments of countries in South Asia like Vietnam, Pakistan and Nepal.

Check out our previous episode with Dr Reza Baqir, the Former Governor, State Bank of Pakistan and the Chair of Advocata, Murtaza Jafferjee.

PUCSL Electricity Tariff Revision is Discriminatory

Originally appeared in the Daily FT

Electricity tariff design must meet two main objectives: firstly, raising the money needed to pay for the costs of provision, and secondly, sending the right economic signals to each customer to favour the optimal socio-economic use of electricity. 

To achieve the above objectives the principles that must be followed when designing tariffs are; 

1. Economic sustainability or revenue sufficiency, 

2. Equity or non-discrimination among users, 

3. Economic efficiency in resource allocation, and

4. Transparency, simplicity, and stability of the methodology.

A well-defined and appropriate tariff structure must balance the financial sustainability of the sector on the one hand and the well-being of various segments of society on the other. The CEB’s tariff revisions seem to be mainly focused on the aspect of revenue sufficiency, ignoring the other aspects.  As electricity is a commodity, there should be no difference in the prices charged to different users, except when reflecting any differences in the cost of providing services to different classes of users.

A differential tariff implies that some categories are subsidised leading to the question of who pays these subsidies. The current structure is such that households consuming an excess of 60 Kwh, and general purpose bulk supply users subsidise the industrial, hotel and charitable sectors.

Households that consume over 90 Kwh and general purpose bulk customers are charged a tariff that is double that of industries and hotels. With regards to hotels, in effect, domestic consumers subsidise foreign tourists. However, the differential tariff between general bulk supply and industrial/hotel users is meaningless. For example, a hall that hosts weddings and celebrations would be treated as a general bulk customer and be charged double the tariff that a hotel would be charged, even though both host similar events. A restaurant in a shopping mall would be charged as a general customer, but the same restaurant located within a hotel would enjoy a tariff half of that which a hotel incurs. While this differential existed under the previous tariff, it is made worse under the new structure; hotels faced a 10% increase in tariff while general users faced a 20% increase.

If the idea behind a lower tariff for hotels is to make the sector more competitive, then the solution is to address the causes of uncompetitiveness directly. One area is construction costs which raises the level of investment and the cost of maintenance.  Protectionism for the domestic construction materials industry raises the costs of steel bars and rods, sanitary ware, aluminium extrusions, granite, electrical fittings, and carpets resulting in high overall construction cost. The effective protection granted on these items can exceed 200%; the savings in finance cost from a lower capital outlay would probably exceed the savings from a lower electricity tariff.

Economic value creation can take place in many different ways in an economy and the service sector is no less important than other sectors. The cross subsidisation between customers violates the equity or non-discrimination principle of a good tariff and discourages use by the overcharged and promotes overconsumption by the subsidised. 

For example, the higher domestic tariff may serve as a disincentive for remote work. Remote or flexible work arrangements can reduce transport costs, congestion, energy use and for some, enable a better work/life balance. The government should be facilitating flexible work but the higher rates applicable to some domestic consumers may be a disincentive.

Economic activity is increasingly complex and a value chain can involve many different sectors. For example, the tea industry involves agriculture, processing in factories, transport, warehousing, blending, financing, marketing and exports. Moreover, products are now more knowledge intensive, so a greater part of the value addition arises in non-production-oriented components of the value chain. With differential tariffs, parts of the same value chain may pay different prices for use of the same commodity.

Further, a lower tariff to “industry” penalises new economy enterprises while promoting highly energy intensive users. This distorts resource allocation by encouraging excessive energy consumption, artificially promoting capital-intensive industries where the country may not have a clear comparative advantage. A subsidised tariff also blunts the incentive to economise.

The cost of supplying electricity fluctuates throughout the day, depending on the power generation mix, cost of fuels used, transmission costs and energy losses but as electricity storage is not economically viable, it has to be consumed whenever it is produced. Households with rooftop solar thus enjoy a subsidy. Domestic solar generation takes place in day time where the cost of generation is low but the import of electricity to the house takes place at night when the cost of generation is high. Offsetting units generated against units imported results in a subsidy because of the difference in costs between the two. Time of use metres should be mandated for all domestic users on net metering with the import/export being accounted for on the respective time of use tariff. Indeed all users who consume above 60 Kwh should move to the time of use tariff. 

Should the government decide to subsidise the capital or operating costs to serve certain customer classes, it should do so directly from the budget and while a lifeline tariff for the poor is justified the high domestic users pay a tariff 7.4x that of the lowest. Not all households are the same size and an extended family living in a single house may face a much higher tariff although their income level may not differ greatly from the average.

The PUCSL should review tariffs to prevent the distortions highlighted above. Instead of cross-subsidies, the regulator should be working to reduce overall cost of the provision of electricity through better procurement and greater efficiency. 

Treating all costs as a pass-through in computing the tariff is a mistake. The PUCSL needs to set efficiency targets in order to set fair and reasonable tariffs. The CEB should be incentivised to control its costs by specifying and enforcing performance requirements. Benchmarking CEB performance against regional and international peers to assess relative efficiency is necessary, as is consulting stakeholders on achievable efficiency targets.

Land, freedom, & Life | Land rights of Sri Lanka's Farmers

About 82% of Sri Lanka’s land is owned by the government. This has resulted in many socio-economic catastrophes such as placing strict limits on the rights of farmers, inability to enhance agricultural productivity, inability to attract investors and many more. In order to rectify this and to come up with reform recommendations, the Advocata Institute has conducted research along with an island wide field survey covering 400 farmers.

In the aim of highlighting the above the Advocata Institute has produced a documentary on ‘Land, Freedom & Life’

The Advocata Institute hosted a live discussion on Land rights of Sri Lanka's Farmers followed by the premiere of the documentary.

The panel consisted of Dr. Asanga Gunawansa, (Lead Legal Counsel Attorney-At-Law), Thilini Bandara (Research Analyst Advocata Institute) & Dhananath Fernando (Chief Executive Officer Advocata Institute)

This video documentary captures the voices of farmers, shedding light on the myriad of  socio-economic challenges arising from the state ownership of the country's agricultural land.

The report will be published soon.

Check out the full panel discussion on Land rights of Sri Lanka's Farmers