Move to boost money circulation

By Lalin Fernandopulle

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 flour.

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 sector spending.

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 airline sector.

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 to do.

The interim budget which mainly targets the 100-day program of the Government it also provides direction of the Government for medium to long-term development.

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 houses.

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 private sector.

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.”