India hands over 450 million for Sri Lanka Unique Digital Identity project

INTERNATIONAL DESK: India, under its ‘Neighbourhood First’ policy, has always come forward to help debt-ridden Sri Lanka, and in the latest instance, Indian High Commissioner handed over a cheque of 450 million for the Sri Lanka Unique Digital Identity (SL-UDI) Project.

Taking to Twitter, High Commission of India in Colombo, Sri Lanka said, “High Commissioner handed over a cheque of INR 450 million to State Minister Hon. @kanakadh, in the gracious presence of Hon. @SagalaRatnayaka today for SLUDI project, which is being implemented through grant assistance by Govt of #India.”

The SL-UDI project holds immense promise in bolstering Sri Lanka’s digital infrastructure and fostering growth across various sectors. With this notable step, the nation inches closer to a more technologically advanced future, poised for enhanced economic development and prosperity, according to Sri Lanka’s President’s Media Division.
The island nation plunged into a financial crisis after the Covid-19 pandemic affected tourism, which is considered the country’s economic backbone, and remittances from citizens working abroad fell. The war in Ukraine escalated the crisis as prices for imports, particularly fuel, rose sharply due to soaring inflation. And in such a situation, India offered its help to the debt-ridden country.

India’s earnest support to Sri Lanka has given the island nation great help in this arduous journey of mobilizing the IMF.

Recently, Sri Lankan Minister Jeevan Thondaman said that the India-Sri Lanka relationship is strong and close, and it was revealed during the economic crisis who is a real friend of Sri Lanka.

He stressed that a “permanent solution” to the fishermen issue is important for India-Sri Lanka’s cultural and economic ties.

Sri Lanka has been facing the worst economic crisis since independence in 1948. Insufficient foreign reserves at Sri Lanka’s Central Bank and loss of access to international capital markets led to the country defaulting on debt for the first time in history.

Additionally, unchecked external borrowings, tax cuts that increased the budget deficit, a restriction on the import of chemical fertilizer and the abrupt floating of the Sri Lankan rupee are a few of the elements that caused the economy to collapse.

And COVID-19 was like an extra addition to their problems as the island nation’s economy is dependent on its tourism sector.

Notably, the economic crisis in Sri Lanka sparked mass protests last year that had forced then-President Gotabaya Rajapaksa to flee the country. He moved out of the country after protesters stormed his official residence as the island nation witnessed an acute shortage of food, fuel, and other essentials.

The country, with an acute foreign currency crisis that resulted in foreign debt default, had announced in April that it is suspending nearly USD 7 billion foreign debt repayment due for this year out of about USD 25 billion due through 2026. Sri Lanka’s total foreign debt stands at USD 51 billion, Daily Mirror reported.

The economy-hit country received approval from the IMF for the 48-month arrangement under the Extended Fund Facility of about USD 3 billion to support Sri Lanka’s economic policies and reforms in March 2023.

Of the total USD 3 billion funds, the country was immediately promised an initial disbursement of about USD 330 million. (ANI)