Budget 2007 to transform Lanka economically

The Budget 2007 has many ingredients to achieve a successful growth for Sri Lanka to rise to greater heights. It is a people's friendly budget presented by a people's President.

In presenting the Budget 2007 in Parliament on November 16, President Mahinda Rajapaksa, in his capacity as the Minister of Finance, achieved a rare first. It is for the first time that in our parliamentary history a Finance Minister has got an overwhelming mandate for a Budget.

Except the TNA, all political parties represented in Parliament, including the main opposition, the UNP, voted for the Budget 2007 along with the Government members. That alone is a great victory for the President and the government.

It has also been commended by many segments of society. Notwithstanding a few criticisms by some political parties outside Parliament and by a few individuals, the Budget 2007 has a clear vision with a firm foundation for a 10-year development plan, targeting mainly agricultural and rural resurgence. The Government aims at rapid economic development throughout the country in line with the Mahinda Chintana.

Special emphasis has been laid on development projects outside the Western Province. The aim of the Government is to extend the comparatively higher living standards and facilities enjoyed by the people of the Western Province to other provinces as well.

That is why a decision has been made to locate projects such as the Weerawila International Airport in the peripheral areas of the island.

The first of the many mega development projects lined up for the coming years, the Weerawila International Airport, got under way last Sunday. That would definitely open a new era of development for the Southern Province. Besides infrastructure development, employment generation and social welfare measures were also included in the Budget.

The per capita income of the people living outside the Western Province would increase. This is a positive sign and it could lead to a better tomorrow. One important proposal is Krushi Navodaya under which Rs. 2,000 million would be earmarked each year for the next three years for an islandwide agricultural development program. It is encouraging to observe several incentives being offered to the plantation sector as well.

At the same time the Government has taken another important decision to support local firms engaged in large-scale construction work. They have been offered duty free concessions to purchase heavy equipment, thereby giving them an opportunity to improve their competitiveness. The main objective of this is not to protect big businessmen, but to retain large volumes of foreign exchange in the country that has been draining out due to the heavy presence of many leading foreign construction companies. Special emphasis is also laid on development of Small and Medium scale Enterprises.

True, that defence expenditure has gone up. But that too is understandable as President Rajapaksa considers national security of utmost importance. The President is committed to achieving peace, but not at any cost. When the terrorists are killing innocent civilians and unarmed soldiers, a responsible Government cannot turn a blind eye as in the past. Peace-loving citizens would approve of this move taken in the best interest of national security and sovereignty. Increasing the budgetary allocation for defence is therefore justifiable.

Despite the rise in defence expenditure, the Government would go ahead with the balance 50 per cent salary hike offered to public servants. Many would not have expected such a move, but President Rajapaksa has proved that he is a leader who would deliver on promises.

While allocations to the highly important education and health sectors have been increased significantly, the Government is looking forward to better public sector management of unnecessary overhead expenditure. This austerity measure no doubt would also help to bridge the budget deficit to some extent.

During the first quarter of 2006, Sri Lanka has achieved an all-time high economic growth of 8.3%. The objective of the President is to sustain that trend. His long-term road map for Sri Lanka is to create an economy that would maintain an annual growth rate of over eight per cent during the next decade so that per capita incomes could be raised to the US$ 3,000 level. President Rajapaksa aims at an economy that would deliver a corresponding level of income even in the districts that are considered backward. This is to be achieved by converting to a knowledge based economy with strong connectivity within the country as well as with the global economy.

Overall, the development process envisaged by the Budget 2007 plans to transform Sri Lanka economically, while at the same time inculcating religious and cultural values so that a more tolerant society could emerge.