CB salary controversy: Issue is not increase but size of it, says Harsha

… asks for reappraisal of pay structure

CB never opposed pay hikes for anyone: Governor

By Shamindra Ferdinando

Chairman of the Committee on Public Finance (CoPF) Dr. Harsha de Silva on Tuesday (05) said what was at issue was the sheer size of salary increase granted to Central Bank (CB) employees.

The SJB lawmaker said so when Governor of the Central Bank Dr. Nandalal Weerasinghe sought an explanation from the House Committee whether the MPs found fault with the Central Bank over the salary increase granted to employees with effect from January 1 this year or the amount (percentage) given in terms of a Collective Agreement.

Dr. Weerasinghe appeared before the CoPF after having responded to questions raised at the party leaders’ meetin chaired by Speaker Mahinda Yapa Abeywardena.

Political sources said that the party leaders’ meeting, as well as the CoPF proceedings, commenced simultaneously. Of the seven Governing Board (GB) members, only Dr. Weerasinghe appeared before the party leaders and subsequently joined GB members, namely A.N. Fonseka, Dr. Ravi Ratnayake, Anushka S Wijesinha, Vish Govindasamy, Rajeev Amarasuriya and Manil Jayesinghe.

Responding to CoPF’s Chairman’s declaration that the Parliament felt that salaries of Central Bank employees shouldn’t have been increased by so much, Dr. Weerasinghe emphasised the need to explain their position in this regard.

Dr. Weerasinghe said that the Central Bank had never advised the government not to increase the salaries of state sector employees. Everyone’s income had to go up for the economic crisis to be resolved. “Salaries of both public and private sectors should be increased as soon as possible depending on the availability of funds.”

Dr. Weerasinghe said that the Parliament could say that the salary increase granted with effect from January 1 this year should have been delayed by one year. They could debate whether the increase granted to Central Bank employees was morally right now or a year later, he added.

Dr. Weerasinghe said that the government granted salary increases to an extent it could. The Governor was referring to the salary increase announced by President Ranil Wickremesinghe, in his capacity as the Finance Minister in the 2024 Budget.

Dr. de Silva pointed out that the House Committee had raised the issue over the size of the latest Central Bank salary increase and not the salary increase itself.

A statement issued by Janakantha Silva, Director Administration and Acting Director Communication, disclosed that during the party leaders’ meeting with the Central Bank team it transpired that as a result of the latest increase their monthly salary bill would go up by Rs 232 mn.

Dr. de Silva said that the Central Bank was a regulated monopoly. Therefore there was no competition. The former UNP State Minister emphasized that the Central Bank was regulated by Parliament.

Dr. Weerasinghe reiterated that the Central Bank was not of the view that salaries shouldn’t be increased.

Responding to Dr. Weerasinghe contention that the Central Bank had to look after its employees, Colombo District MP de Silva said all establishments faced that issue and it was not limited to the Central Bank. Economists weren’t the only category affected by the current crisis but doctors, engineers as well as other categories of workers.

Dr. de Silva urged the GB to reconsider the size of the salary increment.

Dr. de Silva yesterday told The Island that the House Committee believed the CB Governing Board would address the concerns raised by Parliament at the level of CoPF and the party leaders as well.

In spite of big boasts of rapid economic recovery and all sorts of claims, the country was in a precarious situation and the unexpected situation caused by the Central Bank salary increase could undermine public faith in the government, Dr. de Silva said.