Budget 2012 :
Relief measures for the masses
*Revival of Underperforming Enterprises and
Underutilised Assets Act will not have any adverse effect on private
*Living standards of the people have gone up
*Most of the loans obtained in 2002-2003 has
come down to 86 or 87 percent
* Foreign reserves of over US$ 6 billion
Telecommunications and Information Technology Minister Ranjith
Siyambalapitya said the Governmentís expenditure has increased in the
2012 Budget, with the intention of taking the country forward. It also
contains a series of relief measures which are expected by the people.
The Minister in an interview with the Sunday Observer said according to
the information received and the Appropriation Bill which has been
presented the Government through the budget is ready to make the
biggest-ever expenditure for 2012. Of this expenditure the majority of
the money has been allocated as capital expenditure and it would be over
50 percent of the total expenditure of Rs. 2,220 billion. Relief given
to the people, has not been curtailed in the upcoming Budget.
The Minister said when an analysis is made, living standards of the
people have gone up. Salaries for public servants have been increased.
Income for the paddy farmers, tea small holders, rubber small holders
and Samurdhi beneficiaries have also been increased. The percentage of
those who live below the poverty line which was over 25 percent in 2002
has come down to eight percent at present. If there is no improvement in
the living standards of the people, poverty cannot come down to eight
percent. I donít say we have performed 100 percent in all the sectors,
but taken as a whole, the country has been able to reach a good
He said the Revival of Underperforming Enterprises and Underutilised
Assets Act will not have any adverse effect on any private sector
industries or entrepreneurs as claimed by the Opposition.
Only 37 underperforming industries have been named in this Act.
Taking over these underperforming industries is an encouragement to
investors who have the ability to move forward through proper management
skills in keeping with the requirements of the country.
Q: As far as the budget is concerned since costs are heavy
what kind of relief would the Budget offer?
A: I have no ability to comment on the relief measures to be
given to the people in the Budget.
According to information received and the Appropriation Bill the
Government is ready to for the largest expenditure for 2012. Of this
total expenditure, majority of the money will be for capital
expenditure. This would be over 50 percent of the of Rs. 2,220 billion
I would say the Budget has also not reduced or curtailed any relief
given to the people. Capital expenditure is needed when a country is
moving forward. However, people expect to safeguard subsidies or
increase them further. Public servants also expect a pay hike.
At the moment, I am not in a position to comment how salaries or
other benefits will be increased singularly. But as a whole there is a
significant change in expenditure compared with the previous year.
Recurrent expenditure will also exceed Rs. 1,000 billion.
The Budget has increased expenditure with the intention of going on a
long journey while containing a series of relief measures which are
expected by the people.
Q: The Opposition warns the Government against a possible debt
crisis, citing the economic melt-down that affected East Asian countries
some time ago. Is there any truth in this?
A: Certainly not. The Government overcame so many economic
challenges in the past, which were much worse than this.
When I was Deputy Finance Minister, I witnessed severe economic
challenges faced by the country in 2008, similar to the situation in
The 2008, economic recession was the biggest economic challenge faced
by the country. At that time, Sri Lanka faced this recession,in addition
to a war against terrorism. Therefore, we are a country that has
experienced the impact of both these challenges simultaneously. After
Sri Lanka gained Independence, we have not faced such an economic
recession. The Government can face a this challenge due to the sound
economic policies adopted.
The country is in a very stable position. Now we have foreign
reserves of over US$ 6 billion.
Most of our loans obtained in 2002-2003 as a percentage of the Gross
Domestic Production (GDP) has come down to 86 or 87 percent. Nobody can
say that the Government is in a debt trap.
The Government has entered a successful journey of taking the country
Q: Critics allege that despite an economic growth of 8.2
percent, living standards of the people have gone down resulting from
escalating prices of goods. Would you explain the implications?
A: According to the principles of Economics, we can talk on a
different angle about various sectors of society.
In Economics, it is not difficult to find some plus point to build
these arguments. But when we analyse it as a whole, living standards of
the people have gone up. Salaries were increased for the public
servants, the income to paddy farmers, tea small holders, rubber small
holders and Samurdhi beneficiaries have also increased.
The percentage of those who live below the poverty line which was
over 25 percent in 2002 has come down to 8 percent.
If there is no improvement of the living standards of the people, the
countryís poverty levels cannot be reduced to eight percent. I donít
say, we have performed 100 percent okay in all the sectors, but as a
whole we have been able to reach a good position.
Q: Now look at the Revival of Underperforming Enterprises and
Underutilised Assets Act, which the Opposition has dubbed as the
Expropriation Act. Will this deter foreign investments as alleged by the
A: This Act will have no adverse effect on any private sector
industry or entrepreneur as claimed by the Opposition.
Only 37 underperforming industries have been named in this Act. All
these institutions belong to the Government and had been vested with the
private sector far a certain period.
A series of concessions had been given to these industries but they
have failed to show any progress. Therefore, taking over these under
performing industries will not have an adverse effect on any private
The Government has named these 37 loss making industries. This has
provided the opportunity for any capable private investor to take over
these institutions as well.
Therefore, I see this move as an encouragement given to investors who
have the ability to move forward through proper management in keeping
with the requirements of the country.
Q: Foreign aid is an important component for development. Is
there any shortage of foreign aid from traditional sources due to
alleged human rights violations?
A: These human rights allegations have had no impact on the
flow of foreign aid. But there is a change of traditional aid and loans.
One of the key reasons for this situation, is that the country is not in
the position it was ten years ago. Being a third world country, we were
very backward. The country has now reached a stable position gradually.
Today, we are a country which has the potential to successfully exceed
its per capita income to over US$ 2000. It is natural that the change of
composition of some countries and other international monetary agencies
which provide aid and loans to a country like Sri Lanka.
But we are focusing attention on other countries, financial agencies
and the open market for financial aid. This is normal and an emerging
country has to face the situation. It is not because of any fault of the
Government or alleged human rights violations levelled by NGOs or the
Q: Considering the billions spent on the Southern Expressway,
what benefits specially in monetary terms will acquire to Government
A: This is the first Expressway to be opened in Sri Lanka. As
interpreted in Economics, Expressways are considered as one of the key
sectors of an economy. The Southern Expressway would be of great
assistance towards the attempts made by the Government to take the
country forward. It would bring immense benefit to the economy.
Q: What benefits can be expected to the telecom sector in
amounting of work for the Budget?
A: President Mahinda Rajapaksa has vested a large the
The Ministry in collaboration with telecommunication sector and
information technology institutes intends to double the existing
computer literacy rate and to increase the IT sector employment by
another 200,000. Arrangements have also been made to turn income gained
from computers to US$ 2,000 million.
We wish to see everybody using computers in the future. To achieve
these targets, we have a four or five year time frame.
I think this 2012 Budget has created the necessary environment needed
for us to commence this journey. We can talk about it on November 21.
Q: What are the Governmentís plans to expand information
technology and broadband internet to all areas?
A: We will facilitate and expand these two sectors. This
Ministry was created by combining the telecom and ICT sector.
We hope to provide more facilities and more equipment to these
institutions. We have also focused attention on a methodology to provide
easy internet facilities to the people at affordable rates. Computers
are being used more and more, we intend to utilise the computer as a key
income source to the country by saving a large amount of money which
goes out of the country at present.
The Ministry in association with experts will prepare a special
report to decide on targets to be achieved by us within the next five
years. It will be submitted to Cabinet and we will move forward based on
We will provide this report to the media and also create a dialogue
with the people to educate them on the facilities to be given to them
and changes to be made in this sector.
Q: Sri Lankans use nearly 17 million mobile phones, out of a
population of 21 million. What kind of Government policy led to this
huge mobile penetration?
A: The main reason is that the Government has been able to
create an atmosphere where people can use mobile phones at very
affordable rates. The Government created an open competitiveness in the
market on mobile phones without having a monopoly.
These two factors helped the people to easily buy and use a mobile
phone at affordable rates. When there is rapid economic development,
there is some sort of cash exchange among the people.
If the people are not in a position to meet their daily requirements,
whatever competition is made in the market or reduction of prices of
mobile phones would not enable them to buy a mobile phone. People are
able to buy mobile phones as their purchasing power has increased.
Q: What is the Governmentís plans for the telecom sector in
the coming years?
A: We have laid emphasis to provide more facilities to the
telecommunication sector. We want to expand internet facilities
throughout the country. The Government has decided to utilise more than
25 percent of the tax income gained from the telecom sector, to provide
more internet facilities to remote areas. Special attention has also
been focused to provide telecom facilities to the North and East
provinces as well. We hope each area in this country will be equipped
with internet and telecom facilities within the next two or three years
due to this commitment made by the Government.
Q: There are some places which offer very cheap overseas calls
using internet and skype facilities. Is there anything that can be done
to stop such revenue losses in this technology driven age?
A: Definitely. The Telecommunication and Information
Technology Ministry is in its infancy. Once this Ministry was
established, we formulated a report by specifying targets to be achieved
by this Ministry. The report has also mentioned how to recover money
that has been lost to the Government. The Ministry will take necessary
steps in this regard shortly.
Q: Are any more licences being granted for cellular and other
telecom services in Sri Lanka?
A: I canít give a definite reply to this question. Because it
depends on present day needs. Todayís need may change tomorrow. We are
ready to take decisions in keeping with these changes. We always see the
importance of implementing a flexible policy in this sector.
Q: With the impending switchover of TV and radio broadcasts to
digital technology, has the Government decided what to do with the
analog frequencies which will be vacant? Will they be auctioned off like
in some other countries?
A: Certainly. We are a country which faced three decades of
terrorism. Sometimes we had to follow strict rules and regulations due
to the security situation in the country. Today we have been able to
lift some of those regulations and act in a free and fair manner. In
future, we hope to address this issue in a more systematic and