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by ELMO LEONARD and DEEPAL WARNAKULASURIYA

Trade Chambers on Thursday welcomed the second budget of the United National Front Government as progressive and development-oriented. Although no immediate benefits can be seen, the budget has spelt out measures targeting a better future for the country.

Chairman Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), Macky Hashim said the budget showed positive signs of economic stability and development of the country.

He described the budget as country-oriented as it contains mid- and long-term benefits to the country. The budget addresses the provision of more employment opportunities and getting the maximum participation of the business community for the development of the country. However, he reiterated that Minister Choksy should have expressed his target time periods for the required development.

Public debt, contained at Rs. 550 billion in 1994, which increased to Rs. 1,450 billion by 2001, has been brought down by the Government, he said. He added that the UNF Government's second budget has reduced inflation to nine per cent from 14.2 per cent while keeping the expected economic growth at a satisfactory level compared to the previous years.

Lal de Mel, former President FCCISL said the new pension reforms would encourage youth to join the private sector and start more self-employment projects. He added that the welfare benefit law and administrative level reforms will help the government with a steady foundation for the development of the country.

Senior Vice President FCCISL Nihal Abeysekara welcomed the proposals to give housing loan facilities for low and middle income households, human resources development as well as the Rural Economy Resuscitation Fund.

A Ceylon Chamber of Commerce (CCC) news release states that the budget is consistent with the Government's policy and incentive framework to facilitate growth through public, private sector partnerships while focusing on an improved framework of governance and accountability. CCC welcomes the tax holidays provided in the context of the current difficult environment to encourage new investments.

The initiatives taken to manage the large public debt burden faced by the nation is also lauded by the CCC as factors leading to greater employment opportunities for the youth.

President National Chamber of Commerce of Sri Lanka Chandra Embuldeniya welcomed the fiscal and tariff measures in the budget but cautioned the Government against bringing the retail trade under the Value Added Tax and said that it should be differed for a while.

Chairman Commercial Bank, Mahendra Amarasuriya said it would be detrimental for the private sector to find fault with the budget, for it is presented at a time when the economy is trying to raise its head, following a recession. He called on the private sector to make use of the incentives in the budget, and help revive the economy. The present budget, although described by the Government as development-oriented, did not seem to be that exciting, he said.

A country's budget should comprise an overall economic development plan for the nation to follow on a forward march. However, Sri Lanka's budgets of the past years changed their goals in an ad hoc manner, nullifying the previous years' plans, Amarasuriya said.

According to the budget, Sri Lanka's economy would grow 5.5 per cent in 2003, and 6.5 per cent in 2005. An overall plan is needed for the growth of each sector, Amarasuriya said at the Ceylon National Chamber of Industries post-budget seminar.

No specific strategies have been proposed to improve exports, the industrial and small and medium industrial sectors, Amarasuriya lamented.

He lauded the proposal to make beer available throughout Sri Lanka as a move which would help reduce the dependency on illicit liquor.

Chartered Accountant Rajan Asirwathan said previous budgets had generated interest among the citizens of the country. However, in recent years even before the budget was announced, prices of goods had increased. This year, the prices of bread, petrol and gas went up before the budget, proving an anticlimax to the budget.

Asirwathan was cautious about the proposal to charge a tax on foreign currency earnings. Earlier there was no tax on foreign remittances; if remittances were taxed, the money would find its way into overseas banks, denying Sri Lanka foreign exchange.

Asirwathan lauded the proposal to allow unit trusts to invest overseas. He also complimented the charge of VAT on banks, for it would jolt banks to operate cost efficiently.

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