Abstract

For the first time, the Island Country of Sri Lanka is experiencing the worst economic crisis ever. This type of economic chaos in Sri Lanka can be said to be the consequence of the poor decisions taken by the government due to which Sri Lankans from all walks of life are struggling since there is not enough money, fuel, or food available. This type of poor governance has a domino effect that paralyzes all the important and key economic sectors. The first and foremost reason is the Large-scale borrowings at high-interest rates with stringent restrictions from international financial organizations. Then the nationwide ban on chemical fertilizers served as the second justification. The third one resulted in significant revenue loss for the government due to the enormous increase in the annual income threshold for personal income tax waivers and the reduction of Value Added Tax rates. The fourth was the government's nationwide adoption of the organic farming policy, which had a significant negative impact on yield. The fifth was that the tourism sector is experiencing severe problems and fewer foreigners are visiting the island nation regularly due to the impact of the Covid-19 pandemic.

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