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Contents
News: Sri Lanka is going through an economic crisis. It’s facing issues like long queues in front of petrol stations, steep rise in prices of essential commodities and frequent blackouts.
The Sri Lankan economy has been facing both domestic and foreign debt. In addition, Sri Lanka has been facing a trade imbalance crisis since COVID-19 pandemic.
What are the cascading impacts on India?
Illegal migrants have started entering Tamil Nadu (16 people already entered recently). In addition, Tamil Nadu is already hosting nearly three lakh refugees after the anti-Tamil pogrom of 1983.
It can also increase the smuggling and trafficking related activity from Sri Lanka to India.
What steps can be taken by Sri Lanka?
Colombo has approached India, China and the International Monetary Fund (IMF) for help.
Sri Lankan leadership should restructure the administration of concessions and subsidies. It should not bother about the Compulsions of electoral politics while doing so.
In addition to areas badly hit by the current crisis. The political devolution and economic development of the war-affected northern and eastern provinces should also be carried out.
How has India helped Sri Lanka?
In response, India has provided assistance of $2.4 billion. It includes a $500 million loan deferment and $1 billion credit line to enable the supply of essential commodities.
Way forward
The crisis may serve as an opportunity to solve the bilateral issues of Palk Bay fisheries dispute.
Source: The post is based on an article “Crisis in Sri Lanka) published in The Hindu on 25 Mar 22.
