Accolades for Budget 2011

Budget 2011 of the United People’s Freedom Alliance (UPFA) Government, presented by President Mahinda Rajapaksa, was passed in Parliament last week with a thumping majority. It received a record number of votes at the third and final reading - the highest ever since the current Constitution was introduced in 1978.

No Government in living memory had passed a budget by such a large number of votes. Thus, the UPFA Government and its visionary statement Mahinda Chinthana, on which the Budget proposals were based, have amply demonstrated its strength and acceptance by a large number of Parliamentarians.

There was a time when the Opposition resorted to various tactics to topple previous Governments which had a wafer-thin majority in Parliament.

Nevertheless, the landslide victory of the UPFA at the general election in April leaves no room whatsoever for such opportunists as the masses have endorsed fully the Mahinda Chinthana - Idiri Dekma.

President Rajapaksa, who is also the Finance and Planning Minister, presented Budget 2011 in Parliament last month. The policies of the Mahinda Chinthana were the guiding principle when Budget 2011 was prepared, which could be best described as heavily development-oriented.

The Opposition failed to offer any constructive criticism during the Budget debate, except for distorting matters for the sake of voicing against it. None of the Opposition Parliamentarians presented any worthwhile arguments or facts to criticise Budget 2011. During the entire Budget debate, the Opposition exposed its political nudity, as it was unable to confront the people-friendly Budget presented by the First Citizen himself.

The 2011 Budget deficit is a record low for the first time in many years.

The total revenue and grants envisaged in the Budget amounts to Rs. 986.1 billion whereas the total expenditure proposed amounts to Rs 1,419.9 billion. The budget deficit which was eight percent of the GDP excluding grants in 2010 will be slashed to 6.8 percent under the new Budget.

On the other hand, the Budget has granted multifarious concessions to industrialists, agricultural entrepreneurs and public and private sector employees. It has fulfilled the expectations of public servants and pensioners. All public servants will be paid a special allowance equivalent to five percent of their basic salary from next month.

Moreover, their monthly cost-of-living allowance has been increased to Rs 5,850.

Pensions will also be increased by Rs 750 per month for those who retired before January 1, 2004 while those who retired between January 1, 2004 and December 31, 2005 will get an increase of Rs 250 per month.

Surprisingly, not a single State sector job was granted during the 2001-2004 Government of Ranil Wickremesinghe and the worst affected were the graduates who passed out from State Universities. In contrast, the UPFA Government has expanded its graduate recruitment drive through the 2011 Budget. Another 10,000 graduates will be recruited in the fields of engineering, administration, planning, teaching, technical services, agriculture extensions and other skills. This is apart from the 1,500 graduates who will be recruited as management trainees at State banks and financial institutions.

As a former Labour Minister and trade union leader, President Rajapaksa has again recognised the contribution of the country’s working class, identifying them as “our biggest asset”. Ever since he became Minister of Labour in 1994, the President was deeply cognizant of the dual treatment relating to pension rights. He advocates that everybody should receive an income after retirement. This is precisely why the President, through Budget 2011, had proposed to set up an Employees’ Pension Fund to provide post retirement pension benefits to employees in the private and corporate sectors. Undoubtedly, this would ensure the security of millions of people employed in the private sector and semi-Government institutions.

The 2011 Budget attempts to sustain Sri Lanka’s achievements and manage future risks in the local economy. Sri Lanka has achieved a near eight percent economic growth rate. Inflation has stabilised around six percent.

The poverty level has dropped to 7.6 percent and the unemployment rate to five percent. These indicators were landmark achievements during President Rajapaksa’s first term of five years. During this period, the country’s per capita income doubled to US$ 2,000. The Government aims to double it again to US$ 4,000 during the next five years.

As President Rajapaksa highlighted during the Budget speech, an economy with a high per capita would help Sri Lanka to regain many opportunities the country had lost during the past 26 years. This would provide a better quality of life for the present and future generations. The Government has strengthened the country’s economy with sufficient external assets. The Central Bank has built US$ 7 billion reserves, apart from the country’s banking system which has a further US$ 1.5 billion.

It should not be forgotten that Sri Lanka has scored all these milestone achievements despite overwhelming odds. While waging a relentless war against the most brutal terrorist outfit in the world, the Government simultaneously embarked on massive development projects which many considered miracles.

The country is now heading full steam towards economic prosperity to become the Wonder of Asia. When the President spearheaded the country’s battle against terror, there were many prophets of gloom who said that it would be an impossible task. Similarly, President Rajapaksa’s new vision would definitely help elevate Sri Lanka to become the Wonder of Asia in the near future.

People from all strata of society have commended the 2011 Budget which aims at achieving the country’s development goals. The current tax system has been simplified to a great extent and the people at large will benefit by the Budget proposals. The simplification of the tax system would help bring down the prices of essential commodities. There is no gainsaying the fact that the development-oriented 2011 Budget would definitely increase the people’s income and purchasing power.