Sri Lanka unveiled its biggest ever war budget as it vowed to defeat Tamil Tigers and announced new taxes additional borrowing to plug the gap spiraling government spending and revenue.

India Thursday formally handed over to the international Red Cross nearly 1,700 tonnes of relief material meant for civilians displaced by war in Sri Lanka’s north, but a top government official insisted that Colombo alone would distribute the aid.

Amnesty International last week called on Sri Lanka's government to stop blocking humanitarian aid intended for the more than 300,000 people displaced by fighting in the north.

The LTTE continue to be an extremely potent, most lethal and well-organised terrorist force in Sri Lanka and has strong connections in Tamil Nadu and certain pockets of southern India, a tribunal said.

The Week's exclusive interview with B. Nadesan, LTTE Political Chief

Despite a poor human rights record and even as Sri Lanka spurned advice from international monetary agencies, continuing with its policy borrowing heavily to fund a dragging military offensive, Asian Development Bank announced USD 630 million to the island over the next three years.

Sri Lanka has appealed to "friendly countries" to buy tea to help the country weather the global financial crisis.

Industry experts predicted the loss of EU trade concessions for Sri Lankan textile exports would lead to massive closure of apparel manufacturing units and loss of at least 100,000 jobs in the Indian Ocean Island.

The All Party Representatives Committee (APRC) is a farce of the Sri Lanka government. It was always used to impress upon India and the International Community. The basic premise of the APRC not to go beyond unitary constitution of Sri Lanka, will not bring in any meaningful result.

At a time of global financial crisis, Sri Lanka’s reliance on borrowing combined with plunging foreign exchange reserves, spiraling inflation and poor fiscal policies are making Sri Lanka the most vulnerable in the region, according to international monetary experts.

For the past few months Sri Lankan troops have been trying to advance on three fronts in Vanni.

Ridiculing the war expenditure of the Rajapkse administration UNP parliamentarian Ravi Karunanayake says the government has spent over forty million rupees to kill one member of the LTTE since 2004.

Shops and commercial establishments in Tamil Nadu shut down and the state's roads wore a deserted look as a result of the traders' bandh (shut down) Friday on the Eelam Tamils issue.

The Indian government may be bereft of all guts to do anything in Sri Lanka. But at least it can render a great service by not talking about the 13th amendment as a basis to resolve the crisis.