2007 Budget to expedite development

by Lalin fernandopulle

The business chambers in their post Budget evaluations said the 2007 Budget is a 10-year comprehensive economic plan to expedite development activities in the country.

President, Federation of Chambers of Commerce and Industry Sri Lanka (FCCISL), Nawaz Rajabdeen welcoming the 2007 Budget said that it is people-friendly, positive and ambitious with a practical approach to solve the problems of people.

The country cannot have any progress without infrastructure development. Flyovers and a solid road network are urgent to develop the country, Rajabdeen said.

He said that issues regarding the railway system are not sufficiently addressed in the Budget. There should be a plan implemented for an efficient railway system in the country without delay.

The FCCSL welcomes the 60,000 housing plan for shanty dwellers in the Colombo Municipal Council Division. Around 150 acres of land are occupied by shanty dwellers and by providing them houses in other provinces the land could be used for private sector development activities through a private public sector partnership, Rajabdeen said.

He said Entreport trading should have started 20 years ago but it was better late than never as Singapore, Dubai and Hong Kong have gained immensely through it.

Tax reduction on jewellery to 5 percent from 20 will benefit craftsmen and boost the local jewellery industry.The VAT reduction will help jewellery traders to compete better with foreign exporters in the region.

The import tax of Rs.300 on a pair of shoes will be an incentive to manufacturers and a protectionist measure to safeguard the industry in the country, he said.

The chamber also welcomes the move to develop infrastructure facilities in the estate sector by addressing educational and health issues. The subsidy on rice flour would be a big boost to the community, Rajabdeen said.

Chairman, Ceylon National Chamber of Industries (CNCI), A.K. Ratnarajah said the CNCI is happy to see the emphasis on improving productivity by President Mahinda Rajapaksa in the Budget.

The Budget has given top priority to infrastructure development but the Chamber's concern is whether the government with other burning issues in the country such as the North East conflict could implement it.

"We welcome the proposal to remove the VAT on electricity and industrial fuel but it would be only a short term cash benefit. The electricity tariff for the industrial sector at US$ 0.007 cents will help the industry, but when it would be implemented would be the question, Ratnarajah said.

Ratnarajah said the incentives for the leather industry and reopening closed factories are most welcome.

The CNCI's request to ensure that standard goods are imported by obtaining SLS has been taken note of in the Budget.

President, National Chamber of Commerce Sri Lanka (NCCSL) Nirmali Samaratunga said NCCSL welcomes the 2007 Budget which supports the local industry particularly the SMEs, agriculture and construction sector.

We are happy to note that measures are being taken to address the energy issue. The focus on developing advanced technology and research is a positive step, she said.

The NCCSL commends President Mahinda Rajapaksa's effort to bring about peace which is a prerequisite for progress and prosperity of the country.

Chamber of Construction Industry Sri Lanka (CCISL), CEO, Dakshitha Thalagodapitiya said the chamber is pleased to see that the 2007 Budget has prioritised infrastructure development in its 10- year medium term plan.

Infrastructure development is an essential prerequisite for social and economic growth. The CCISL is prepared to offer its expertise and resources to assist the Government in its efforts to fast track infrastructure development endeavours, he said.

The CCISL will give its fullest support to carry out infrastructure development activities such as construction of roads, highways, Colombo Port expansion, construction of new ports and power plants which are crucial for national development.

CCISL is happy with the enhancement of the depreciation allowance on machinery used in the construction industry from 12.5 percent to 25 percent and the reduction on the rate of withholding tax from 5 percent to 1 percent on consultation fee.

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