Encourage private investments to grow beyond 20% GDP

Achieving a 7.5% GDP growth with a total investment of 28% is tough. Therefore why not encourage private investments to grow beyond the planned 20% of GDP queried Deputy Vice Chairman, Ceylon Chamber of Commerce Dr. Anura Ekanayaka at the Post Budget seminar held last week.

He said to achieve this objective the investment climate should be improved substantially while an independent regulator is a must.

According to an international report released a few weeks ago Sri Lanka has been ranked 89 in the rankings of doing business globally.

These rankings have nothing to do with finances but the investment climate.

The private sector together with the government has a greater responsibility to improve the investment climate by building a partnership to eliminate red-tape and bureaucracy which shies the investors away from our country.

He said that during the period 1996-2005 3.75% of GDP was committed for medium term economic infrastructure while for next year it has been increased to 5% but with all the infrastructure projects in the pipeline will this allocation be sufficient?, he queried.

Some of the other issues, Dr. Ekanayake raised were whether the proposed deemed dividends tax will inhibit investments, will the new VAT rules aggravate the delays and impact investments, will the Provincial Councils introduce too many taxes and will the new loan loss provision restrict bank lending for risky businesses.

Speaking of CCC expectations, he said, sustain high rates of GDP to eradicate poverty and unemployment and to achieve these objectives growth should be spread beyond the confines of the western province.

SG