Budget on development and relief

The third Budget of President Mahinda Rajapaksa's Government has paid special emphasis on the development of the local economy as well as relief measures for the public.

The public would breathe a sigh of relief that the budget has not placed additional burdens on them, despite the increased expenditure on national security and ongoing battle against terrorism. The Budget proposals for 2008 are not only positive but also challenging as it aims to reduce the fiscal deficit to seven percent of Gross Domestic Production (GDP).

It has focused on the development of the Eastern Province, which was recently liberated from the clutches of the LTTE. It is a province where the Sinhalese, Muslims and Tamils live in perfect amity in almost equal ethnic strengths. None of the Governments earlier had ever paid any attention to develop the East.

The Government does not wish to see innocent people rescued from the jaws of the LTTE Tigers, living in camps set up for Internally Displaced Persons (IDPs). Thus, the development program for the East, proposed in the 2008 Budget would help those displaced people to settle down in a reawakened East. Another important factor that is bound to attract investors for development projects in the East is the five-year tax holiday for those who wish to set up business ventures. This will stimulate investments and bring economic prosperity to the area.

As President Rajapaksa emphasized in Parliament, Budget 2008 is based on four priorities - infrastructure development, relief to low income groups, reawakening local enterprises and improving local products.

Though the 2008 Budget was presented amidst various challenges, the Government has given a clear indication that they would not compromise on matters relating to the nation's national security. The progress made on the national security front, and the national priority that has been accorded to protect Sri Lanka's sovereignty and territorial integrity should not be compromised.

In his speech, President Rajapaksa invited one and all to join hands to generate an economic growth of over of 7.5 percent next year, by expediting all key development projects, to create a prosperous country in line with the Api Vavamu - Rata Nagamu, the national food production drive. We must exploit the favourable weather conditions and rich soil we are blessed with to increase local investment and production in the backdrop of the enthusiasm created in the private sector, and commendable achievements we have gained with regard to Lanka's national security.

The Government anticipates a revenue surplus of Rs. 38 billion from the 2008 Budget and attempts to change the 30-year long practice of financing a part of the day-to-day expenditure from borrowings.

Our borrowings would be mobilised only for development ventures, which in turn generate income to service debt repayments. The Government has sustained a high average economic growth rate of seven percent over the past two years, the highest ever by Sri Lanka in 30 years.

On the other hand, the development process should necessarily include an infrastructure network that provides opportunities for people living in rural areas to benefit from the economic growth. People should feel the tangible benefits of development. That is the aim of the President and his Government.

Though the UNP attempts to portray a different picture, people living in remote areas would warmly welcome the efforts to strengthen the co-operative sector. The Budget has proposed a wide array of concessions to be granted to the co-operative system. To strengthen the existing system, the President has proposed to link over 300 Co-operative Societies all over the island to Lak Sathosa outlets, which would be exempted from all forms of taxes for five years. This would help the outlets to offer essential items at affordable prices to consumers in rural areas.

The incentives provided to the key sectors - rural development and high technology machinery and the continued commitment of the Government to upgrade infrastructure in the country should be appreciated.

Increasing the budget allocation for the fertiliser subsidy would undoubtedly be a big boost to the country's agriculture while the increase in the buying price for fresh milk and the increased fine for the slaughter of cows too would help the industry in a big way.

The Government has offered all these subsidies and welfare measures at a time the country is engaged in a relentless battle against terrorism.

During the 2001-2004 UNP Government of Ranil Wickremesinghe comparatively nothing was spent on national security and the UNP could not present a Budget to win the hearts of the rural masses. They could not offer even a single employment opportunity in the Government sector.

It is well known who ruined the CWE (Sathosa) and sold it to the private sector, completely neglecting the needs and aspirations of the rural folk.

As one of Asia's biggest distribution networks, the CWE and Co-operative Societies could have played a major role in offering essential items at affordable prices.

The Government's goal is to take the rural sector towards economic prosperity. It's the bounden duty of all political parties who care for the country to endorse the people's friendly budget.