These days it has been seen that Sri Lanka is going through a very savior economic crisis. The condition of the country has become so bad that you can guess from the fact that the Ministry of Power of Sri Lanka is forced to cut the power for 7 to 8 hours. Also, the government has also had to switch off-road lights and this is a serious issue. In Sri Lanka people have been forced to have long lines near the fuel station, just like the fuel station, you will also see the long line at the food shop.
The bus driver has refused to drive the bus They say we don’t have fuel to run the bus. People do not even have the necessary food, the government has put a limit on food, under which now people can buy food only up to a limit, they cannot buy more than that, no matter how much money they have, you got an idea from all these things. You can see how serious the situation is in Sri Lanka.
The present economic crisis in Sri Lanka
Sri Lanka is facing a sovereign risk Autonomous risk means that when a country is put on the stage that it cannot repay its debt. It means that country is at autonomous risk. Sri Lanka’s foreign exchange reserves have declined by 70 percent in the last few years And inflation in Sri Lanka has increased by 16.8 percent.
Sri Lanka has a debt of $7 billion in 2022 and has an overall debt of $45 billion which Sri Lanka has to pay but sadly Sri Lanka has only $2.31 billion in foreign exchange reserves. Due to all these reasons, the value of Sri Lanka’s currency is falling, at this time the value of 1 dollar is 297.99 Sri Lankan Rupee. Sri Lanka does not have enough dollars to buy oil from outside.
Sri Lanka crisis reason
One of the main reasons for the economic crisis in Sri Lanka is structural weaknesses. we can understand it in such a way that Sri Lanka imports more and exports less similarly, there is a decrease in tax revenue, spending less money on development and foreign service to the people.
Weakens currency reserves. Apart from this, Kovid 19 has also had a deep impact on the economy, especially on the tourism industry. Before Kovid, the Sri Lankan government had a turnover of $ 4 billion from the tourism industry but now it has reduced to 1 billion dollars after covid-19.
With this, the sudden switch of the government to organic farming proved to be fatal for the country’s economy, because organic farming is good for the environment but not in terms of productivity. And due to this, there is a decline of 25 to 30 percent in the agriculture sector. has been seen. And as a result, the government has to import food from outside.
India help to Sri Lanka
Now let’s read how India is helping Sri Lanka, which is a neighboring country. The exchange will mean that Sri Lanka will return this money to India on predetermined terms and conditions and has given a credit line of 1 Billion Dollars for food, fuel, and medicine imports.
There are many other such projects on which the government of both countries is talking among themselves.
Sri Lanka wants an Indian company investment in Lanka and opens its own company. and also want the help of the Indian railway to make the Sri Lankan railway better.
Why did India help Sri Lanka?
It is crucially important that any disillusionment with China in Sri Lanka eases India’s effort to keep the Lankan archipelago out of China’s ‘string of pearls’ game in the Indo-Pacific.
In this region, containing the Chinese presence and influence is in India’s interest.
India can provide low-cost assistance to alleviate the hardships of Sri Lankans, but it must do so with caution, and it must keep in mind that how its assistance is perceived matters as well.
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