Comment: Implementation of Budget proposals vital

The new tradition of preparing the budget with the inclusion of public proposals started in 2004, after the UPFA government came into power. The UPFA changed the policy making process and enabled all interested groups to present their views, suggestions and proposals for policy formulation.

According to the finance ministry over 750 public proposals were considered by the President and treasury officials in preparing the 2007 budget.

Therefore there were no budget secrets brought in a black box. Proposals submitted by interested groups such as business chambers, professionals, and trade unions were given heed to making it a people's budget.

The post budget discussions are now taking place scrutinising the budget and there are positive and negative comments. Some argued that the incentives to the marginalised people were not sufficient. Last year the government offered many concessions to marginalised groups, vulnerable sectors and increased the salaries of government servants. Funds have been allocated to continue them and therefore in this respect the government has done its part and the rest is the responsibility of the other concerned parties.

The Opposition (UNP) argued that this budget does not have direction. But if you look at the proposals carefully there is a direction and it continues to implement the 2004 UPFA government economic policies.

The SME sector was considered as the backbone of the economy and various initiatives were taken to develop the sector. The 2007 budget has extended further assistance to the SME sector too.

Since 2004 priority was given to the agricultural sector and its benefits are now being enjoyed by a majority of the people in the country.

The excessive paddy harvest in the country is one good example and it is the duty of the industrial sector and entrepreneurs to obtain state patronage such as the incentives given in the budget and formulate proper purchasing, milling and a marketing system. A wide gap in the regional distribution of income is the main structural issue in the economy.

Government policies coupled with favourable weather boosted the agricultural sector during the last two years. Paddy production has increased and now the country produces an excessive paddy harvest as a result. However, the sector is subsidised and there are costs, quality and marketing issues.

The 2007 budget has some proposals to address these issues. A loan scheme to provide technology, machinery and equipment will help improve productivity in the agricultural sector. The Budget also proposes concessions for machinery imports for rice mills, which will help to address marketing issues.

In addition the Budget has proposed incentives for plantation, agriculture, fisheries, prawn farming and livestock sectors.

The industrial sector is the main focus of the Budget in broader terms. The proposed infrastructure projects would remove the main stumbling blocks for industries in Sri Lanka. The high cost of power reduces the competitiveness of our industrial products in the international market.

Today the apparel industry of Sri Lanka faces intense competition in a fully competitive market. The Government wants industries to move to the rural areas, but infrastructure is the main concern. Both government objectives and industrial sector requirements would be fulfilled only if these projects are implemented as scheduled on time.

Budget 2006 targeted a medium term economic development plan. Budget 2007 proposes a ten-year national development strategy. Some sectors question how does a government with a mandate for five years plan a ten-year future.

All the long term projects and broader objectives of the policies go beyond the term of a government. For decades the business community has urged all parties in power to solve these problems. Today there is a consensus between the main political parties in the country over the main issue.

It is a timely need that the consensus is extended to economic issues as well because routes of the national conflict run to economic inequalities. If such a consensus could be reached long term development strategies are more realistic.

According to our discussions the business community is happy about the budget proposals and in brief what they feel is that the government has given all what it can give. It is not easy for a country to give everything which has been engaged in an endless war for over two decades.

As President Mahinda Rajapaksa said in his concluding remarks of the Budget speech as a nation, we all have to sacrifice our today for a brighter tomorrow.