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| Sunday, 19 May 2002 |
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Small industries appeal for govt. help Members of the Sri Lanka Chamber of Small Industry (SLCSI) recently met the Adviser to the Ministry of Policy Development and Implementation R. Paskaralingam to explain the difficulties faced by the small industrial sector. The main problems highlighted by the Chamber were higher electricity tariffs, tax on interest for fixed deposits, Value Added Tax and the current economic climate. The members said that all is not well in the small industrial sector. A series of remedies long overdue are urgently needed if they are to survive. President SLCSI Aloy R. Jayawardene said: "The power crisis and the price hikes in electricity are wreaking havoc on industrial units, burdening them financially. There is no purpose in presenting budgets which are supposed to be people-friendly if the essential needs of the people and the industrialists' right to uninterrupted power is not met." He said that if the price of electricity is increased to Rs 15.80 per unit, they would be forced to close down factories and smaller units. Mr Jayawardene said: "SLCSI has been fighting over the years for the enactment of regulations which would help small industrialists to expand and be more competitive. "India has structures against the dumping of often substandard goods by foreign producers, but Sri Lanka lacks such regulations." He also said that concessionary funding which would help the country grow is still a distant dream. Instead the little that is already available has been slashed drastically. The 20 per cent preference for local products and services which compete with imported Indian counterparts was cancelled by the Ministry of Finance in 1997. Earlier local industrialists enjoyed a 30 per cent domestic preference on tenders. He stressed the need for restoring this measure as it will otherwise make Sri Lankan industrialists lose tenders to better positioned bidders from India. At the time of passing the Appropriation Bill, the limit on tax on interest for fixed deposits was increased to Rs 72,000 per year. The prices of consumables are high. As electricity prices increase, the money is not enough to live on. "Therefore, we appealed to the government to increase the threshold to Rs 240,000," he said. He said the small manufacturer must be encouraged to expand production and the tax should be levied for the amount exceeding the threshold limit without taxing the entire amount. This will allow the small manufacturer to expand his/her production. Mr Jayawardene said that the development of roads, transport facilities, efficiency at ports, adequate power, labour reforms and improvements in security are among the measures required to develop competitive efficiency and advantage. He was of the view that a global economic recovery is essential for an industrial recovery here. "Unless we put our house in order to reduce costs and improve the efficiency of our industries, we may lose our competitive edge in the industrial markets," noted Mr Jayawardene. |
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