Sri Lanka’s Cooperative sector has become a burden to the treasury as it has to reimburse the massive bank loans obtained by a large number of cash strapped Cooperatives countrywide, official sources said.
A cabinet paper presented by the then Minister of Trade and Commerce Rishad Bathiudeen Cooperatives struggling with bank loans will be given a reimbursement.
Accordingly the ministry has already paid Rs. 100 million in bank loans owed by coops through Treasury funds.
Another Rs. 390 million in cooperative loans will be reimbursed by the treasury on the directive made by the ministry with the President’s consent, a senior official said.
The Ministry has already announced that with immediate effect all cooperative societies of Sri Lanka are exempted from income tax.
This will result in good savings for these Cooperatives but for heavy burden for the treasury, he added. .
“All cooperative employees across the country have been given an additional monthly allowance of Rs. 1,000 and they will be entitled to a pension on a Presidential directive.
The provision of heavy vehicles to cooperatives at low rates will also be done now since the President has given his approval.
All these new decisions have been arrived at during the tenure of the then Minister Bathiudeen with the consent of the President to make this important movement a key driver in the economic growth and reform vision of the Government, a Ministry official claimed.
Sri Lanka’s cooperative sector completes its 115th anniversary this year. Sri Lanka’s cooperatives movement began in 1904 with the commencement of a rural credit society in Menikhinna village, Kandy in the Central Province and today 40% of the Lankan population processed the member ship of cooperative societies.
There are 14,500 such societies today across the country, with huge assets and savings base close to $ 3 billion.