Move to boost money circulation
The interim Budget presented by the new Government last week was
hailed as a people-friendly and pro-development budget by the business
community and the public who have been waiting long for reductions in
food prices which skyrocketed in recent months.
The concessions given to various sectors and consumers with the
reduction in 13 essential food items was commended by business leaders
as a sound move to boost circulation of money that will have a trickle
down impact on developing private sector businesses.
Sri Lanka Standards Institute Director General, Dr. Lalith Senaweera
said that it was a well-focused budget as it addresses most of the
burning issues of society on a priority basis and also proposes
appropriate alternative sources for collecting funds while providing
concessions to the public.
The interim budget proposed a Rs.10,000 increase in the salary of
public sector workers and strongly recommended a Rs. 2,500 increase in
salaries for private sector employees. A 15 percent interest rate for
one million in bank accounts of senior citizens, Rs. 20,000 allowance
for pregnant mothers and an increase of Rs. 1,000 for pensioners.
The Budget reductions in local milk powder prices, a maximum retail
price for imported milk powder of Rs. 325, reduction of Rs. 300 on a
domestic gas cylinder, slash in prices of sugar, corriander, sprats and
The marriage registration fee was slashed from Rs. 5,000 to
Rs.1,000.Commercial Bank Director Preethi Jayawardena said that the
interim budget has a host of benefits for the low income earners who had
been saddled with the soaring cost of living.
Increasing allocation for the education and health sectors and
cutting on waste and corruption are good moves.
However, he said that the new government has to focus on sustainable
income generation to boost investor confidence and maintain public
The merger of SriLankan Airlines and Mihin Air which were considered
as white elephants was hailed by business leaders and travel experts as
a sound move that will help the Government to focus on developing the
The 15 percent tax reduction on motor vehicles (less than 1,000 cc)
was hailed by motor traders as a move that will help boost sales of
small vehicles and increase revenue to government coffers. Many experts
queried as to how the Government could increase revenue with a large
number of concessions and reductions in food items.
Minister of Finance Ravi Karunanayake said that a host of relief was
granted by slashing excessive taxes which the previous government failed
The interim budget which mainly targets the 100-day program of the
Government it also provides direction of the Government for medium to
The further reduction on the price of a litre of kerosene by Rs. 6
was commended by the public who depend on kerosene to light up their
The reduction was also hailed by the fisheries sector as a major
relief to the fuel cost which was staggering.
National Chamber of Commerce of Sri Lanka Deputy President Sujeiva
Samaraweera said that the benefits to consumers will help increase the
cash flow among people which in turn will help boost businesses in the
Millennium Airlines Vice President Suren Mirchandani said that across
the board price reductions and the taxes on the richer segment of
society is welcomed .
The business community also hailed the move to revive the GSP Plus
scheme for apparel exports to Europe and the lifting of the ban on fish
exports to the region.
Heladiv Group Chairman Rohan Fernando said, “The Budget proposed on
Thursday is centred round the promises made at the last Presidential
election against a 100-day program. In relation to that, most of the
proposals are substantial and the government has achieved its objectives
while maintaining a lower budget deficit of around 4.6%. The accent on
arresting wastage especially in relation to the expenditure on the
Presidential system and the large cabinet of ministers is noteworthy.
Highlighting the wasteful schemes in maintaining two airlines at a
heavy loss to the exchequer and revisiting the costs estimated for mega
development projects also give us hope of a cleaner administration.
However, we need to see the implementation of these proposals which
appear to us as pro development involving the private sector. The relief
packages offered by the government will help all and sundry and bring
down the costs of basic consumables and the reduction of fuel cost
should have direct and indirect effect in transport and manufacturing.
However, the call for increase in salaries in the private sector
needs to be looked at in a practical and viable manner.
The budget proposals related to tea export industry needs further
clarification in relation to the floor price for green leaf and the
transfer of funds lying on account of the promotional and marketing levy
in the Treasury.
All in all it is a good Budget under the circumstances and we in the
private sector look towards a definitive pro development budget to be
presented after the parliamentary elections in April 2015.”