Kamaladevi, a 49-year-old office assistant, mother of two and a caregiver, stands outside her place of employment to catch a ride home in the office transport provided by her employers. Like many residents of Colombo and the suburbs, she is struggling to get by as the soaring cost of living makes her daily battle more complex.

Speaking to The Sunday Morning, the Mutwal resident explained why she remained at the office till 8 p.m. to get transport home. “I can’t afford-three wheelers or the bus anymore. There are also fewer buses that I can use to get home. The office transport home allows me to do a bit of shopping and get home without spending more money,” she said.

According to Kamaladevi, her salary of Rs. 36,000 is no longer sufficient to get by running a household of four. The funds run out in less than three weeks, forcing her to seek small loans from friends, family, and lenders.

“Now I am forced to pay off loans first when I get my monthly pay. We have not been able to afford gas to cook for over three months now. I buy firewood bundles at a rate of Rs. 60 each. I can cook for three days with five bundles. We only eat two meals now. Last year I used to buy 15-20 kilos of rice when I got my pay and a few kilos of dhal, today I can’t imagine doing that,” she lamented, adding that finding milk and medicines for her bedridden husband was a heart-breaking experience.

“We don’t know how long we can do this; our house is small, so it is difficult to cook with firewood; my daughter and I wake up early and cook rice for our meals. We only cook once a day. Earlier I could afford dhal and we would make two curries each day. Now dhal is so expensive, we eat rice with coconut sambol,” she said.

Kamaladevi’s sentiments were shared by 41-year-old Rajindra (surname withheld), a motor vehicle leasing salesman and resident of Kottawa. Both Rajindra and his wife (Government teacher) are employed.

“Both of us make close to Rs. 110,000 a month, but we are also struggling. Transport cost, utility bills, and the cost of food have all increased. Luckily, our landlord has not increased the rent so far,” Rajindra explained. According to him, the price hike and availability of petrol affect them as they use it to travel to work and to take their daughter to school.

“We can’t afford to send our daughter in a school van anymore, they have increased the price. With public transport being less available than before, I am forced to rush to pick my daughter up from school and drop her off at the school in which my wife works to make sure she gets home safely,” he said.

Last month the School Transport Vehicle Owners’ Association decided to increase prices, citing the increased cost of diesel and spare parts. The All-Ceylon Three-Wheeler Drivers’ Association also revised the per kilometre rate, with the flagfall now costing Rs. 90 and every other kilometre during daytime costing Rs. 70 as of last week.

The basic bus fare was raised to Rs. 27 this year, adding pressure on many who use public transport to commute to work or school. Sri Lanka also increased the long-distance train fares in March, with tickets increasing in cost from between Rs. 400-600 based on the class of the carriage and the distance travelled.

Struggle to survive

The plight of Kamaladevi (name changed at her request) and Rajindra are common across the country today.

As Sri Lanka weathers rising inflation, shortages, and price increase of essential food and medicines due to the foreign exchange crisis, many citizens find themselves struggling to feed their families and get by.

According to data from the Central Bank, Sri Lanka has recorded a 15.1% rise in inflation this year. Some experts put the number closer to 19-20%. However, according to the Census and Statistics Department of Sri Lanka, both food inflation and overall inflation have exacerbated in the month of March 2022, reaching 30.2% and 18.7% respectively.

The monthly expenditure of an average household of four is a complex task. Food, transport, and utility bills would comprise the bulk of the expenditure. One way to gauge the increase in expenditure would be to analyse the expenditure on food.

According to the latest statistics from the Department of Census and Statistics, the average household income by the end of 2019 was Rs. 63,000. However, the difference in average household expenditure between urban and rural households is reported as Rs. 95,390 and Rs. 57,657 respectively. This is prior to the rupee freefall and the impact of the Covid-19 pandemic on the local economy.

Food costs soar

According to the Colombo-based policy think tank Advocata Institute’s Bath Curry Indicator (BCI), which tracks the monthly changes in the retail price of food, there has been a 14% increase in food prices reported from March to April of this year. In a report published last Friday (6), the ‘Year-on-Year’ increase in food prices is reported at 49% for a sample basket of food. The amount recorded last month is the highest recorded by BCI. The BCI calculates the cost of food for a four-member average Sri Lankan household who shops at markets and goods stores.

BCI recorded the price of a kilo of dhal in April 2021 at Rs. 178, a year later it cost Rs. 466. A kilo of samba in April 2021 was close to Rs. 130, a year later it cost Rs. 210. With food prices increasing at this rate, a family of four would have to pay approximately Rs. 560 more per a week on the BCI basket of food.

Urban poor take a hit

According to Advocata Chief Operations Officer (COO) Dhananath Fernando, the rising inflation and cost of living will disproportionately affect the urban poor. Fernando stated that the BCI – based on CBSL figures – had calculated that an average family of four would have spent a minimum of Rs. 6,680 on a basic rice-and-curry diet during the month of March 2022. It is important to note that this figure is calculated from retail shop prices and does not reflect the prices found in supermarkets. The Supermarket Index for the same period with the same food basket would see an average expenditure of Rs. 7,680 per month.

Based on the assumption that the family of four was able to source a 12.5 kg cylinder of LPG (in March) which is used for up to a month, the expenditure may increase by Rs. 2,675 or Rs. 4,199 if they were using a LAUGFS cylinder.

According to the PUCSL, if the family is in the ‘domestic low users’ category (if monthly consumption is 60 units per month or less than 60 units), their electricity bill per month is not likely to exceed Rs. 500. If the family possesses a motorbike which they use to commute (based on 15 litres of petrol for a month – a conservative estimate), in March, the expenditure on fuel may have reached Rs. 3,850.

As such, an average family of four would have to spend in excess of Rs. 13,800 per month on the most basic diet and to commute. This figure can significantly fluctuate depending on variables such as rent and water consumption and if firewood or kerosene are used for cooking.

“Food inflation hitting nearly 50% affects mostly the poor and underprivileged communities. It is the urban poor that will be disproportionately affected,” Fernando told The Sunday Morning, adding that shortages of essential food items and the exchange rate parity kept pushing the price of essential food and commodities higher each month. The impact of inflation on the take-home wages of most Sri Lankans would see a marked reduction in their purchasing power and thereby impact sales and industry, he opined.

Household income

Last year, Sri Lanka increased the private sector minimum monthly wage to Rs. 12,500 while the daily minimum wage was increased to Rs. 500. According to the Wages Board of the Department of Labour, a Rs. 2,500 budget relief allowance authorised in 2016 and another Rs. 1,000 allowance authorised in 2005 bring the total minimum monthly wage of a private sector employee to Rs. 16,000. The Ministry of Public Administration in January decided to issue a Rs. 5,000 allowance to all public sector officers following a Cabinet decision on the rising cost of living.

Similarly, the Labour Department last year gazetted a minimum daily wage of Rs. 1,000 per plantation sector employee, a long-sought increase which was bitterly resisted by the industry. However, plantation sector employees do not get to work a mandated number of days per month and thereby are only paid for the number of days they are allowed to work. This leaves the plantation sector workers significantly disadvantaged like many others employed in the irregular sector or those self-employed on daily wage rates.

Lasting social impact

According to National University of Singapore Non-Resident Senior Fellow Dr. Ganeshan Wignaraja, the significant increase in inflation has eroded the income of households, which may herald a negative social impact in the medium- to long-term.

“Covid-19 impacted Sri Lanka’s growth and household income. Higher inflation in 2022 has compounded the problem by eroding the real wages – real income – by at least around 20% but possibly higher, thereby hurting poor and disadvantaged communities disproportionately. Families seem to be switching to one or two meals a day and toward low nutritious diets, which will have a lasting impact on child malnutrition and stunting,” Dr. Wignaraja opined in response to a question of the effects of rising inflation.

Institute of Social Development (a Non-Governmental Organisation that studies and advocates for the disadvantaged communities in the plantation sector) Director P. Muthulingam told The Sunday Morning that in the plantation sector, families were worse off due to inflation and the wage gap. He pointed out that an average family of four with two employed in the sector may generate a take-home pay of between Rs. 30,000-45,000 depending on the number of days they worked.

Muthulingam complained that reduced crop yields had reduced the income of an average family and the uncertainty of how much they would be able to spend each week compounded how the family survives.

“There is also a trend of young people returning home from the cities due to lack of employment; this is a rising trend. It causes each family to spend less on each mouth to feed. Also, it means that they do not receive any remittance from the family members who would have sent funds home in the previous years. So many families get by on two meals, the nutritional value of meals has dropped.”

Muthulingam explained that the need to provide lunch money or to pay for public transport was causing children to reduce their school attendance, with many only attending school only on a few days of the week. “We are also seeing a number of children dropping out of schools due to this. The families simply can’t afford it.”

He also noted that the sudden increase in the price of wheat flour (a staple) had affected the community significantly. He argued that efforts by the Government to provide relief for the community through subsidies for wheat flour were short-lived and insufficient to meet the needs of the number of families affected. “Unlike other communities, our community doesn’t own land of our own big enough to grow some basic vegetables or crops with which we can feed ourselves,” he added.

All Ceylon Three-Wheeler Drivers’ Trade Union President Lalith Dharmasekara echoed the sentiments expressed by others, stating that the high cost of living and fuel prices were pushing many three-wheelers drivers to abandon work.

“We simply can’t make enough money at the end of the day to get by. We have leases to pay, the vehicles need regular servicing, and we have wasted time, many hours, waiting in queues to get fuel to work. Also, people don’t have money to take a three-wheeler ride like they used to before,” Dharmasekara said, explaining the plight of one segment of daily wage earners.

State relief

When asked what relief the Government planned to provide the public impacted by inflation, Minister of Trade and Samurdhi Development Shehan Semasinghe told The Sunday Morning that the State had increased the allowance offered to low-income families and elderly through funds made available by the World Bank.

He also said that the Government’s decision on price controls for rice should ensure that it would be available to those in the low-income bracket. He would not discuss details of what relief would be offered in the coming months, except to say that Sri Lanka was working with local and international partners to provide what relief was possible within the current economic crisis.

Salaries in Sri Lanka

According to the Department of Labour, the minimum wage for a private sector employee per month stands at Rs. 16,000. However, many sectors pay above the minimum wage.

According to former parliamentarian and Inter-Company Employees’ Union (ICEU) President Wasantha Samarasinghe, the basic wage of a public sector employee with the recently-approved cost of living allowance amounts to Rs. 31,500 and the basic wage in the private sector is Rs. 16,000, while the take-home wage of those in the sector varies greatly depending on the industry and the employer.

The average monthly wage of a plantation sector employee during a crop harvesting month is between Rs. 27,000-30,000, Institute of Social Development President P. Muthulingam said.

The minimum wage for a public school teacher stands at Rs. 32,000, inclusive of all allowances, Ceylon Teachers’ Union President Joseph Stalin told The Sunday Morning. According to him, a public school administrator or principal would have a basic wage or Rs. 35,000, with the salary increasing as they progress through several grades of payscale.

Meanwhile, a Woman Police Constable in the service of the Police Department is paid a basic monthly salary of Rs. 41,630, with the possibility of up to Rs. 8,000 in addition with allowances. The basic monthly salary of an entry level employee working for the Sri Lanka Ports Authority is Rs. 28,500, with a further Rs. 4,000 added as allowances.

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Asiri Fernando

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