Budget 2015 defines policy framework

By Gamini Warushamana

Budget 2015 is not merely a set of proposals for a year, but the Government's policy direction for the next five years 2015-2020, Deputy Secretary to the Treasury, Dr. B.M.S. Batagoda told a post-Budget seminar organised by the Institute of Chartered Management Accounts (CMA) in Colombo last week.

Dr. Batagoda said that from 2005, Budgets presented by the Government always had this concept and they are not isolated income and expenditure statements and they have been clearly defined policy frameworks to achieve specific goals of the stage of development that prevailed.

Therefore, there are interlinks in all these Budgets and if you carefully look at the 2015 Budget it has links with 2013 and 2014 Budgets as well.

For instance, the fertiliser subsidy which was introduced 10 years ago has been included in this year's Budget too.

In the preparation of this Budget, the President as the Finance Minister met over 25,000 people to seek their views.

The main focus of this year's Budget was inclusive development and the views of all stakeholders of the country helped to bring in the proposals.

Therefore, taking this message to the public is essential to successfully implement the Budget proposals.

The Budgets presented in the past nine years focused on transforming Sri Lanka from low income country to a middle income country.

From this year the focus is to make Sri Lanka a developed country by 2035 or achieving advanced economy status, he said.

There was a clear path in this journey. The first priority of the Government was achieving peace and the second was to develop infrastructure and that too has been achieved.

Today, if you take any sector, ports, highways, electricity, telecommunication or any other sector, they have developed to the highest level in our history, creating an enabling environment for the private sector to do businesses. Over 75 percent of our economy is handled by the private sector and the role of the Government is creating this enabling environment.

All Budget proposals in the past 10 years were aligned in this direction.

All indicators prove these achievements and in the UNDP human development report and many other similar indexes, Sri Lanka's rank has improved.

Most importantly our macroeconomic fundamentals have improved significantly. Interest rates that were over 20 percent have now declined to 6-7 percent. Low single digit inflation, a stable exchange rate and over US $10 billion in foreign reserves indicates the stability of the Sri Lankan economy.

In this Budget, the Government has mainly focused on human resource development to meet the next phase of development. Priority has been given to education and skills development and concessions and various incentives have been given, from preschool children to university students. During this phase of development we expect structural changes in our economy and the agriculture sector's contribution to the GDP will reduce to 8 percent and industrial sector will contribute 32 percent and the service sector 60 percent, he said.