BUDGET 2008:

Budget speech at a glance

Compiled by Dhaneshi Yatawara

Addressing the Parliament President Rajapaksa emphasized, "......, this Budget is being presented amidst many challenges.

The progress made in the national security front, and the national priority that has been accorded to protect our motherland should not be compromised to any challenge." Forty nine proposals spread over the following forty segments.

Main targets

Strengthening the cooperative system; Essential commodity items at concessionary prices for low income groups; Rice subsidy for the plantation sector and neighbouring communities; State Trading Wholesale Establishment; Concession for the fishery sector; Development of a domestic shipping industry; Gem and jewellery; Domestic textile industry; Year Five scholarships; Graduate employment; Foreign employment; Environment Conservation Levy; Income tax; Simplification of the tax system; Collection of tax arrears; Customs Levy; Economic Service Charge; Other revenue proposals; Tax Holidays; 'Neganahira Udanaya'; Development of Lagging regions; Incentives for foreign earnings; Welfare for the apparel sector employees; Free Trade Zone for building material; Housing development; Development of small and medium scale industries; Local milk production; 'Api Wawamu-Rata Nagamu'; Fertilizer subsidy; National priority to address nutritional needs; Intellectual Property Sales Development Centre; Local film and teledrama industry; Incentives for public servants; 'Api Wenuwen Api' Fund; Non-resident Homeland Development Bonds; Drug prevention program; Project Management Department; Coordination between Provincial Councils and Line Ministries; Government expenditure management.

Api Wawamu-Rata Nagamu

"Our country spends around Rs. 30 billion for the importation of milk powder, sugar, vegetables, fruits and wheat flour. As incentive to promote local production of these on a priority basis, I propose to ensure high prices for such local products, by providing safeguards from imports, availing seed and plant material and extending technical support."

Government Expenditure Management

"To ensure the prudent control and management of Government expenditure, a saving of 1.5% in recurrent expenditure and a saving of 7% in capital expenditure has been assumed for final budget estimates.

"While the economic growth achieved in 2006 was 7.7 percent, we have managed to achieve a growth of 6.3 percent during the first 6 months of this year despite setbacks to the agricultural and tourism sectors. It is estimated that a 7.2 percent growth could be achieved in the second half of this year.

As such, the per capita income of our country will be in the range of Rs. 165,000 (US$ 1,500). The unemployment rate which was 8.3 percent in 2004 has declined to 6.2 percent. As of now, country's official foreign reserves have increase to US$ 3,200 million," President Rajapaksa further explained in his speech commenting on the current economic trends of the country.

"Food and energy security could be ensured by switching on to alternative power generation avenues and through local food production, to reduce import costs. Since import substitution industries should also be promoted along with export promotion, many incentives have been extended for such industries to develop within a competitive environment".

"We need to forget personal animosities arising from jealousies and the associated political rivalries when it comes to national security and economic development.

It is not possible to rectify the mistakes of 30 year and to eliminate associated destructions and enter a path that would help to address the needs of the nation within a short span of time or by taking a divided approach and by defaming each other," President stressed.

...... We do not believe that high economic growth alone is sufficient for a meaningful development for our people and the country.

The development process should necessarily include an infrastructure network that provides opportunities for people living in remote areas to benefit from the economic growth, a process that provides equal opportunities for all communities while reserving social and cultural values and creates aspirations of becoming a nation that moves forward with emphasis on innovations."