Proposals for Budget 2015:

Chambers focus on industrial development

By Lalin Fernandopulle

Business and Industry Chamber heads e preparing proposals for the 2015 Budget, said that the Chambers expect the next Budget to be business-friendly and that it would comprise measures to develop local industries.

Ceylon National Chamber of Industries, Chairman Gamini Gunasekera said that the chamber is confident that the benefits given to boost industrial development in the last Budget will be given in the 2015 Budget as well. The previous Budgets provided facilities to promote local industries. The Chamber welcomes a reduction in energy prices which increases cost of production, a drawback in gaining a competitive edge .

Energy prices should stabilise as hydro power generation in the country is high at present.

The 2014 Budget focused on achieving an economic growth rate between 7.5 and 8.0% from 2014 to 2016 and reducing budget deficit to 3.8 percent. A three-year partial tax holiday for listing new companies, interest-free loan schemes for women entrepreneurs and subsidised fertiliser for farmers were some of the benefits in the last Budget.

The Sri Lanka Chamber of Small Industries President Mohideen Cader said that the focus of the chamber is to drive small and medium sector enterprise development.

The past three Budgets laid emphasis on developing this sector but it has not been implemented as yet. “Our aim is to get these proposals implemented. A SME-friendly financial sector with low interest schemes and flexible project based financing, support for sub contracting and forward contracting is vital to drive growth in the SME sector,” Cader said.

He said that a counter–productive tax system is not beneficial for small and medium sector enterprises. Micro financing should be promoted to boost backward integration.

National Chamber of Commerce of Sri Lanka (NCCSL), Deputy Vice President Sujeiva Samaraweera said that the chamber is preparing proposals for the 2015 Budget and added that it will discuss the proposals with other chambers on common issues.

“The NCCSL reiterates its commitment to promote small and medium scale enterprise development through trade facilitation and education. Enhancing skills that will help boost productivity is a key area that the chamber hopes to achieve and looks forward to Government support,” he said.

Lack of professional skills has been a major impediment to drive economic growth through a vibrant workforce. The gap between educational qualifications and job needs should be bridged through performance-oriented training.

National Chamber Exporters, President Mangala Yapa said that undoubtedly, exports have to grow to realise the economic progress that the country envisages.

The Chamber realises and fully appreciate this national need and is doing all it can to encourage and support all members to boost performance and especially improve value-addition in exports.

Apparel, IT BPO, export of business and professional services, maritime and logistics industry and product and service exports that has a heavy input of knowledge will be the key areas that can generate such growth, while other sectors too continue to grow.

“Sri Lanka can no longer be competitive only in terms of low cost labour. Indeed our labour is no longer the lowest. Hence, we as exporters will have to use technology, innovation and productivity improvement to reduce cost and improve our competitiveness in the market,” he said.

“Simultaneously, we will have to focus on niche markets looking for quality products and not so sensitive to price.

Through our involvement in INDEXPO we support all our members to improve the quality of their products and services and competitiveness and thereby improve export performance,” Yapa said.

“We will focus on these aspects in our engagement with the government especially in regard to next year's Budget. Our approach towards the achievement of such growth would be by focusing on skill and competence development, encouragement and engagement in science, technology and innovation-based initiatives and repositioning the brand Sri Lanka,” he said.

Sri Lanka should emerge as a nation that produces quality, innovative, high value-added products and services that are much sought after by customers and not as a low cost, low quality and low or no value-added product and service exporter.

“This needs significant transformation in the way we think, work and sell. The Chamber is taking a progressive, long-term initiative by creating a national institution to develop the next generation of exporters, which would be launched within the next few months. This institution will be dedicated to capacity and competence development of human resources in the export sector,” Yapa said.

He said that the tarriffs and bureaucracies are unavoidable and they will be there.

“What matters is how we deal with them professionally. It is the duty and the role of all the Chambers to engage professionally with the bureaucracies and remove bottle necks,” he said. The way forward is constructive and proactive engagement and finding mutually acceptable methods.

“FTAs are good mechanism to reduce the impact of tariffs and increasing bilateral trade and we as a Chamber welcome the FTA with China,” Yapa said.

“We just concluded a successful seminar where exporters and bureaucrats from almost all areas engaged in a professional and mutually beneficial manner in understanding each other and addressing critical issues and bottlenecks,” he said.

“We are encouraged with the outcome and are happy to create many such platforms on which we can deliberate on these issues. We are confident that there would be a positive response from all stakeholders," Yapa said.

Jaffna Chamber of Commerce, President A. Poornachandran said that the chamber has submitted proposals through the Kandy Chamber of Commerce and Industry. “The Jaffna Chamber has called upon the government to provide facilities for industrial development. Fisheries and agriculture are key areas of the economy in the North which need the support of the government. Reduction of energy prices and a stable market for the produce is essential to sustain industrial growth and boost the SME sector which makes an important contribution to the economy,” he said.

The Ministry of Finance and Planning recently invited chambers and industry stakeholders to submit proposals for the 2015 Budget.