_ BackFINANCE
The funds of a Regional Council would, in terms of Articles 27 and 28 of the 'Package' be derived from eight sources.
Firstly, from such taxes, duties, imposts and rates it would be entitled to levy.
Secondly, from such excise duties as the Finance Commission may prescribe which will be levied by the Central Government but collected in the several Regions by the Regional Administrations.
Thirdly, from the nett proceeds of taxes on wholesale and retail sales, outside the cities of Colombo and Kotte which will be collected by the Central Government and assigned to the Regions from which they were collected on such principles of apportionment as are formulated by the Finance Commission.
Fourthly, from a percentage of the nett proceeds of taxes on sales or income levied by the Central Government which are not attributable to the cities of Colombo and Kotte as will be prescribed by the Finance Commission, which will be distributed among the Regions in the manner prescribed by the Finance Commission.
Fifthly, from such sums as Parliament may provide out of the Consolidated Fund as "grants in aid of Revenue of such Regions as Parliament may determine to be in need of assistance."
Sixthly, from international borrowings made by the Regional Administration subject to such criteria and limitations as may be laid down by the Central Government and with its concurrence.
Seventhly, from domestic borrowings subject to the limitations and criteria as are laid down by the Central Government.
Eighthly, from foreign grants and development assistance in accordance with national policies on international aid as are laid down by the Cabinet and approved by Parliament.
Apart from these eight sources of funds Article 20(3) of the
Package provides that:-
"The Government shall,
on the recommendation of and in consultation with the Commission
allocate from the budget such funds as are adequate for the
purpose of meeting the needs of the Regions."
Finally, though not specified in the Package, each Region will also be entitled to such income as it derives from its property or any agricultural, industrial or business ventures in which it may engage.
The most significant feature of these proposals is the devaluation of the role of Parliament as the keeper of the public purse. In any parliamentary democracy it is the Parliament elected by all the People which will be the final arbiter of how and in what manner the revenue of the State which is the property of all its citizens will be disbursed. In terms of the Package, however, our Parliament will abdicate a substantial measure of its powers in this regard to a Commission composed of three bureaucrats called the Finance Commission. Article 20(3) makes it mandatory on the Government to allocate funds to the Regions on the recommendation of the Finance Commission. Article 27(4) makes it mandatory that certain excise duties prescribed by the Finance Commission that are levied by the Central Government - i.e by Parliament, be assigned to the Regions from which they are collected. Article 27(5) makes it mandatory that the nett proceeds of wholesale and retail sales in any Region be assigned to it in accordance with the principles of apportionment as are formulated by the Finance Commission. Article 27(6) makes it mandatory that such percentage of taxes on sales and income as are levied by the State and collected from the Regions as is prescribed by the Finance Commission be distributed among the Regions in the manner prescribed by the Finance Commission.
These provisions deprive Parliament elected by all the People of its control over billions of rupees of public funds and make it subordinate to the dictates of three bureaucrats sitting in the Finance Commission in respect of the disbursement of such funds. Indeed the only public funds over which Parliament will have control in terms of the 'Package' will be the funds that are left over after it has complied with the orders of these three bureaucrats !!
Article 12 of the Constitution provides that "all persons are equal before the law" and that "no citizen shall be dicriminated against on the grounds of race, religion etc. The author of the 'Package' appears to have been totally oblivious to this salutary and essential constitutional provision when he devised the provisions of the Package relating to the Finance Commission - for Article 20(1) of the `Package' provides explicitly that the Finance Commission shall consist of "three members representing the three major communities" - i.e. one Sinhalese, one Tamil and one Muslim (Moor). All citizens of all other races inhabiting our land such as the Malays, the Burghers, the Parsees, the Sindhis, the Borahs and the Colombo Chettys regardless of qualification, eminence and suitability for appointment to this all important Commission will, therefore, be permanently disqualified from appointment on the grounds of race alone.
So powerful will the Finance Commission be that not only will
it be able to dictate to Parliament how public funds should be
disbursed, but its decisions, however arbitrary and however
discriminatory of any racial group of citizens of any Region they
may be, will be totally immune from review even by the Supreme
Court, for Article 20(8) of the 'Package' reads:-
"No Court or Tribunal shall inquire into, or pronounce
on, or in any manner entertain, determine or rule upon, any
question relating to the adequacy of such funds, or any
recommendation made or principle formulated by the
Commission".
It was presumably the fact of the vast and unchallengeable powers to be vested in the Finance Commission, the danger of any community or communities receiving favoured treatment by the allocation of disproportionate funds to a Region in which it or they constitute the majority or a powerful minority, and the consequent need for the interests of each community to be looked after that prompted the Government to make provision for communal representation for the three major communities in the Finance Commission. In providing for communal representation, however, the Government has seen fit to provide that the Sinhalese who comprise 74% of the population should have but 33 1/3% representation on the Finance Commission, and that the Tamils [both Sri Lankan and Indian] and Muslims [Moors] who together comprise but 25.3% of the population should have 66 2/3% representation. Thus, in the ultimate analysis the power of determining disbursements of public funds to the Regions now exercised by Parliament elected by all the People will, if the Package becomes law, be abdicated by Parliamenrt in favour of two bureaucrats representing 25.3% of the population.
Whoever may disapprove of this proposal, nobody could have any doubt that the late G.G.Ponnambalam would have given it his wholehearted approval - for according to his convoluted thinking, this would constitute 'balanced representation'!!
Anybody with even a nodding acquaintance with the practice of the law will be fully aware of the futility of a statute imposing prohibitions or restrictions without corresponding provisions for the enforcement of such restrictions or prohibitions.
The 'Package' glibly assures the People that though Regional Administrations will be empowered to engage in foreign and domestic borrowings as well as to obtain foreign aid, such powers will be strictly controlled by the Centre, in that all borrowings both domestic and foreign, would have to be within the limitations prescribed by the Centre; that all foreign loans would have to be taken with the concurrence of the Centre; and that foreign aid could be obtained by the Regions only according to the policy prescribed by the Centre.
All this is fine on paper - the only snag is, how will these 'delightful'provisions be enforced ?? What steps will the Government be entitled to take if a Region engages in foreign or domestic borrowing outside the prescribed limitations; or in foreign borrowings without the concurrence of the Centre; or in obtaining foreign aid in violation of the policies laid down by the Centre ?? The 'Package' maintains a deafening silence on these matters rendering the theoretical restrictions so glibly provided for, not worth the paper on which they are written.
Sri Lanka is a small Country which is, in extent, less than 7/10ths the average extent of the several constituent States of the Union of India. No Province or proposed Region of Sri Lanka is self-sufficient nor possesses an economy that is in any way independent of the economies of the others. The economy of each constituent Province and District of Sri Lanka is so closely intertwined with and connected to the economies of the others that the collapse of the economy or the administration of any one part of the Country would necessarily affect the economy and the stability of the other Provinces as well. Thus, the stability of the economy or the administration of any of the proposed Regions can never be a 'domestic' matter of concern to that Region alone - it would rather be a matter of grave concern to the rest of the Country as well, and consequently the duty of the Central Government to ensure the stability of the economy and the administration of its several constitutent Regions.
Even the effete government of J.R.Jayewardene realised this self-evident fact when enacting the Thirteenth Amendment to the Constitution which devolved a quantum of powers on Provincial Councils which, though vast, was not even scarcely comparable to the powers sought to be vested in Regional Councils by the 'Package'. Thus, the Thirteenth Amendment made provision for the audit of the accounts of Provincial Councils by the Government (18). It also made provision empowering the President to assume to himself all or any of the functions of a Provincial Administration, and to make the powers of a Provincial Council exercisable only under the authority of Parliament if he was of opinion that the administration of that Province cannot be carried on in accordance with the Constitution; and even for Parliament to confer on the President the power to make statutes that may be passed by such Provincial Council (19). Further, it empowers the President, when satisfied that a situation has arisen whereby the financial stability or credit of Sri Lanka or of any part of Her territory is threatened, to give directions to the Government of any Province to observe such cannons of fiscal propriety as he may specify (20). One examines the several pages of the Package in vain to find any comparable provision.
The resultant position would, therefore be, that while each of the several Regional Councils would be entitled to raise its own finances by way of such taxes, rates and duties it will be entitled to levy at its discretion, and to raise foreign and domestic loans and obtain foreign aid subject to certain restrictions imposed by the Central Government in theory, but unenforceable in practice, and to receive from the Central Government such amounts as are determined not by Parliament, but by a majority decision of three bureaucrats, two of whom will represent minority communities, the Central Government will be deprived of any control over either the quantum or source of or the purpose for which such loans are taken and aid received, or the disbursement of any such funds. The recipients of Central Government grants of public funds namely the Regional Administrations will not in any way be accountable to the giver of such funds, namely the Central Government, in respect of their disbursement. This in turn, would mean that even if a Regional Administration engages in large scale borrowing, whether domestic or foreign in excess of its capacity to repay, and thereby erodes international confidence in the fiscal probity of Sri Lanka; engages in proligate non productive expenditure and even utilises foreign loans, or aid, or grants given by the Central Government to recruit, train and arm a secessionist army and otherwise prepare for a war of secession; or causes galloping inflation in the Region or the collapse of its economy, both of which will have their dire effects on the rest of the Country; or discriminates against the residents of particular parts of the Region in the matter of the allocation of funds for development or the maintenance of essential services; the Central Government elected by all the People could do nothing about it.
The LTTE with the backing of the immense lobby of Tamil Chauvinists at home and abroad, and with, for a period of several years, the might of India, was unable to destablize or destroy the entire economy of our Country. The 'Package', formulated by our own Government will doubtless achieve what our enemies both present and erstwhile have failed to do. Having such 'friends', do we need enemies ??