People's friendly budget
Protecting Sri Lanka from terrorism and
shielding the masses from unfavourable world economic trends were the
hallmark of the people's friendly budget presented by President Mahinda
Rajapaksa in Parliament on Thursday.
In presenting his fourth budget as the Minister of Finance, President
Rajapaksa proposed a wide range of benefits for the masses, mainly aimed
at bringing down the cost-of-living and achieving long-term economic
benefits to the country, including the development of local industries
and strengthening the rural economy.
It was a commendable move by President Rajapaksa to immediately bring
down the fuel prices, reduce bus fares and grant special discounts to
lower income groups with reduced electricity and water tariffs. The
reduction of petrol, diesel and kerosene prices was widely expected and
now it's the duty of the Trade Ministry and Consumer Affairs Authority
to ensure that the benefit of the reduction of oil prices is passed on
to the consumer.
The Government will also consider another reduction of fuel prices in
the forthcoming months, provided the world oil prices stabilise at its
present level. The objectives of President Rajapaksa and his Government
are crystal clear - to grant every possible relief, that would benefit
the majority of the society.
It was the common man and the working class who have emerged
victorious through the reduction of fuel prices, bus fares, electricity
and water tariffs, VAT and income tax and the enhanced cost-of-living
allowance granted to public servants and pensioners.
It was heartening to note that the Government was making every effort
to protect local producers and exporters apart from strengthening the
rural economy. The Government proposed an additional cess on imports on
many items, including refrigerators and garments to discourage imports
and encourage local manufacture. The Mahinda Chinthana policy is to
encourage local producers and production.
Despite various views expressed by die-hard critics and political
opportunists, the Mahinda Chinthana's ten-year Horizon Development
Framework is being widely implemented across the country. At the same
time, the humanitarian operation to eradicate terrorism has reached its
final phase.
Though a considerable sum has been allocated to finance the battle
against the LTTE's ruthless terrorism, massive development projects have
been undertaken by the Government and hundreds of thousands of
employment opportunities have been provided for youth. Rural production
has increased considerably, making farmers in the provinces the victors.
This is an important and positive sign as the cash flow has now been
diverted from the city to rural areas, thereby increasing the purchasing
power of villagers, who are making an active contribution to the
national economy.
The country's GDP has grown by an average seven per cent and
inflation has decreased in the past several months. The per capita
income has doubled during the past four years. Unemployment was reduced
from 800,000 to 500,000, providing 300,000 new employment opportunities.
Significantly, it was the rural youth who have mostly benefited from the
new employment opportunities. The Government has taken several
meaningful steps to increase State revenue which was Rs. 331 billion in
2004 to Rs. 712 billion in 2008. In addition, the revenue from Income
Tax has registered a record growth of Rs. 143 billion. This is a
favourable trend under which the Government has maintained a Revenue/GDP
ratio of 16 per cent.
Budget 2009 has introduced a series of measures for the welfare of
public servants and pensioners. The cost-of-living allowance paid to
public servants would go up to Rs.4,500 with an additional expenditure
of Rs.12,000 million by the Government. The cost-of-living burden on
pensioners too has been reduced with the present allowance being
increased to Rs.2,000.
Budget 2009 has also given due recognition to our valiant Security
Forces.
The Government has paid tribute to our soldiers by proposing to
increase the monthly allowance to Rs.5,000 for which an additional
Rs.4,500 million is needed.
Protecting low income households with special discounts on water and
electricity would undoubtedly win the hearts of the masses. Under the
special discounts, households which consume less than 90 units of
electricity and 15 units of water would benefit. More than 350,000
electricity consumers and 150,000 water consumers will benefit from
these relief measures.
Local dairy farmers have been further protected with an increased
Special Commodities Levy on imported milk powder. Similarly, the
Commodity Levy on imported sugar has been increased to protect the local
sugar industry and sugar cane cultivation.
All these measures contribute to a 'people's friendly' budget,
presented by a 'people's President', who completes his third year in
office on November 19 as Sri Lanka's fifth Executive President.
What is most significant is that all these concessions have been
proposed amidst unfavourable world economic trends and increased defence
expenditure to eradicate terrorism. Import substitution, saving foreign
currency, promoting local industries and farmers were the underlining
themes of this year's budget. At the same time, industrialists,
hoteliers and entrepreneurs would benefit immensely from the fuel price
reduction which would have a major positive impact, thereby leading to
the further reduction of inflation.
The President's proposals, aimed at infrastructure development, too
are commendable. More importantly, Sri Lanka has achieved a growth rate
of around seven per cent which demonstrates that the country has now
moved on to a higher growth path. This has been made possible due to the
Government's favourable policies towards the industrial and service
sectors. In addition, the agriculture sector too has achieved
comparatively a higher growth rate.
The fourth budget of the UPFA Government under President Rajapaksa
has correctly addressed several issues by catering to the fundamental
requirements of the people. Unlike what happened during the previous
regimes, State properties will not be sold to bridge the budget deficit.
The Government has steered the economy in the right direction despite
the global economic downturn. |