Budget to meet people's aspirations

The second budget of the Mahinda Rajapaksa administration will be presented in Parliament on Thursday. The presentation will come two days before the 61st birthday of President Mahinda Rajapaksa, who is also the Minister of Finance.

As a person who always lives with the common man, President Rajapaksa is a man who could feel the pulse of the people. He is, therefore, well acquainted with the economic difficulties of the common man, and the information is, he has not curbed any welfare measures or subsidies. Nor is he likely to impose new taxes on the consumers.

Thus, Thursday's budget is sure to be 'consumer friendly' and would meet the aspirations of the people.

In formulating the Budget 2007, the Government had also given an opportunity to the public to forward suitable proposals. It is reported that in his capacity as the Finance Minister, the President has accepted several of the near 800 proposals received and had made allocations to implement them in the coming year.

Earlier this week, the All Share Price Index (ASPI) reached an all-time high at the Colombo Stock Exchange, surpassing the previous record level of 2,551.4 points it reached on November 16, last year.

The ASPI closed the day at 2,558.1 points last Wednesday, gaining 25 points compared to the previous day. The 53-point gain saw the Milanka Price Index closing at 3,330.1 points on Wednesday. This is an indication of the investor interest and confidence in fundamentally sound counters.

Despite the ruthless terrorist acts by the LTTE in recent times, investor confidence has become more buoyant. This could be attributed mainly to the high economic growth rate achieved so far this year.

An increase in defence expenditure is inevitable as the security of the nation has been given foremost priority. Nevertheless, the Government expects to maintain the budget deficit at five per cent, which could be the lowest in the recent past.

While taking the 'Mahinda Chinthana' vision forward, the Government's 2007 budget proposals are expected to lay heavy emphasis on infrastructure development.

Hence, Rs. 733 billion or 55.6% out of the total Government expenditure of Rs. 1,319 billion would be allocated as capital expenditure.

Amongst the major infrastructure development projects that would be implemented next year are the Weerawila international airport, Hambantota harbour phase 1, the Colombo South Port development project, the South-East Highway, the Norochcholai coal power and the Upper Kotmale hydro power plants.

President Rajapaksa's second budget is expected to focus more on the urgent needs of the rural sector.

The Government will allocate five billion rupees for rural electricity generation projects in Hambantota, covering all households in the district. The easing of several adverse economic conditions such as the tsunami disaster and the positive trends in the apparel industry would see Sri Lanka's economy facing a lesser challenge in the coming year, compared to 2006.

Our economy has shown a marked improvement in recent times. Despite many ups and downs, the country has been able to maintain a growth rate of 7% this year. The unemployment rate is at an all-time low 6.3%. If these impressive indicators could be maintained, Sri Lanka should be able to achieve its targeted growth rate of eight per cent next year too.

Most of the goals of the economic policies adopted by the Government during the past three years have been achieved. For example, far reaching decisions taken in the agriculture sector have brought encouraging results. Local rice production exceeds the domestic demand. If the cost factor and the quality issues could be overcome, export of rice would be a possibility.

It will be a challenging task for the Government to meet the aspirations of different segments of society.

While the corporate sector would be looking for tax holidays and other benefits, the lower and middle-income groups would look forward to immediate solutions to their cost-of-living problems.

The Government will have to offer higher incentives in the form of tax holidays, if Sri Lanka is to attract more foreign direct investment (FDI).

Despite different views expressed on the A-9 highway at the recent Peace talks in Geneva, the return of the Tigers to the negotiating table itself is a victory to the Government. With their popularity rapidly on the wane, the LTTE terrorists in the North would be using every possible tactic to use civilians as a human shield.

The deteriorating support from the Northern Tamil people has been a major concern to the LTTE. With the ever-increasing international voice against terrorism, the Tigers have no option but to talk with the Government and opt for a negotiated settlement. This would directly help to attract FDIs as well as to facilitate the smooth functioning of the economy.