SMEs will drive economic growth:

Budget to focus on local industries

By Sanjeevi JAYASURIYA

This year’s budget proposals will incorporate some of the recommendations put forward by the National Chamber of Commerce (NCCSL) to alleviate the difficulties of the SME sector. The SMEs which comprises 80 percent of the country’s producers have long being neglected, a top NCCSL official said.

The thrust will be on helping the agricultural sector and local industries. The problems of the agricultural sector which have not achieved targets due to the lack of facilities will be addressed.

The joint introduction of new technology such as hybrid planting material with public-private partnerships (PPP) will use underutilised resources in research institutes and universities to set up distribution nurseries for such planting material to growers, to be supported by interest-free loans for those using drip and sprinkler irrigation systems and private sector organisations that make mini poly-lined storage tanks for rain water harvesting.

It has been suggested that these projects be funded by interest-free, five-year loans with a grace period of one year.Meanwhile, it has been proposed that the Sri Lanka Export Development Board bear the stall costs of Sri Lankan exporters who display their products at exhibitions overseas.

This facility may be given to large and small-scale exporters of traditional and new markets.

Registered exporters of other export products should be allowed to sell their products for foreign currencies (USD) through foreign exchange earning accounts as the income tax rates applicable to the export sector will benefit small-scale industries.

He said that local industries facing unfair competition should be given protection until such time as the local industry is in a position to manufacture quality products in sufficient quantities. The introduction of anti-dumping regulations to overcome this situation will also be proposed.

A new survey will be carried out to assess the availability of wind power and to encourage investors in this regard. We propose to provide accelerated depreciation on investments in the first year. A tax holiday of 20 years will be granted and all earnings generated from alternative power projects will be exempted.

With the country’s inability to meet the ever- increasing demand for skilled labour, it is proposed to provide appropriate tax concessions for local companies to improve skills of their staff and enable the local industry to successfully face international competition.

Moreover, labour laws will be made more investor-friendly.