The Sunday Leader

Government Delivers!

  • Further relief granted through new government’s maiden budget

By Hasitha Ayeshmantha

The new government delivered the goods both literally and in reality by making strong sentiments and by granting further relief to the general public of Sri Lanka through the announcement of their maiden budget, Budget 2016.

Minister of Finance Ravi Karunanayake on Friday presented the Budget 2016 for the Democratic Socialist Republic of Sri Lanka and laid to rest all rumours which have been revolving around the Budget by announcing that the government has proposed to further reduce the prices of ten more essential food items.

The coalition government’s budget covered all areas extending from major subjects such as banking, agriculture, exports, infrastructure development, local enterprise development, insurance etc.

Delivering the Budget statement, the Minister of Finance stressed that the government has presented a futuristic budget which ensures transparency and economic growth within a proper democratic framework. He said that the government intends to make Sri Lanka a favorable investment destination and encouraged the local investment sector to intensify their procedure.

Karunanayake further remarked that the country should diversify the financial sector, especially the banking sector and also seek to utilise the maximum through the amalgamations of low-functioning banks, and in return create  a complex and sophisticated product.

Reiterating the statements made during the interim budget, the Minister of Finance also pointed out that the new government has capitalised on their principals of economic growth through people’s empowerment.

Commenting on the Budget 2016, Minister of Megapolis Patali Champika Ranawaka and Tamil National Alliance Parliamentarian M. A. Sumanthiran said that the government has ensured relief for the people and had established confidence. Both Ranawaka and Sumanthiran commended the effort by stating that the government has covered the most vital areas through the Budget.

 

Education

Education has been prioritised and has been allocated 05.41% of the Gross Domestic Production (GDP) from the 2016 budget, Finance Minister Ravi Karunanayake said.

The Minister proposed to allocate Rs. 10,000 million to upgrade schools and to provide electricity for all schools. Furthermore, Karunanayake said that university students are to be given interest-free loans to buy laptops.

He further stressed that the government has ensured that all the educational sectors will receive its due attention and also stressed that the new government is willing to invest in the education sphere and that they have realised the potential in the educational sphere.

It was made clear that the government has prioritised education as a vital factor for their maiden budget as they prveiosuly remarked that more investments, both financial and technological should be brought in to the educational sector and that there should be ample space for individual growth and career building.

 

Price Reductions

Addressing the parliament during the second reading of the 2016 budget, Karunanayake said that prices of potatoes, big onions, local and infant milk powder, sprats, dried fish, LP gas and kerosene will be reduced.

He added that as promised in the elections manifesto of the United National Party (UNP) and as a common promise made prior to their re-election to parliament; the new government has taken the appropriate measures to further strengthen the relief presented earlier through the interim budget. He further added that the aforesaid reductions are an attempt to reduce the cost of living of the people and further strengthen the individual economic structure of the general public.

Accordingly,

Packet of local milk powder (400g) will be reduced to Rs. 295

Infant milk powder prices will be reduced by Rs100

Trade taxes imposed on Potatoes and Big onions will be reduced by Rs25.

MRP of Sprats will be Rs 410 (01kg),

MRP of Dhal will be Rs.169(01kg).

Price of LP gas (12.5kg) will be reduced by Rs 150.

Price of Kerosene will be reduced by Rs.10

MRP of canned fish (425g) will be Rs. 125

Dried fish – Katta MRP Rs 1100. Saalaya MRP Rs 425

MRP of grams will be set up at Rs Rs 169

 

Private Sector

Minister of Finance Ravi Karunanayake also requested all  private sector employers to increase all private sector employees’  salaries by Rs.2500 and also requested to idolise the five working days policy.

Karunanayake strongly remarked that in order for the country to achieve the said economic growth, it is a mandate for both the  private and state sector to function in unison and contribute to the GDP growth. He stressed that under the present pretext, more state-sector and private-sector partnerships will have to be established and properly coordinated. Entrepreneurs income tax reduction

To foster Micro, Small & Medium entrepreneurs, Venture Capital investments will be encouraged to provide equity investments and provide technical and monetary support, the Finance Minister Ravi Karunanayake said presenting the 2016 Budget.

To facilitate this income tax on Micro, Small and Medium entrepreneurs will be reduced by 50% for the first five years with effect from April 01, 2016.

However, the debate on the Second Reading of Budget 2016 will be conducted for nine days and the vote on the Second Reading will be taken in the afternoon of  December 02. The Committee Stage or the Third Reading of the Budget commences on December 03. The Committee Stage debate will be held for 15 days and the vote on the Third Reading is scheduled to be taken in the afternoon of 19 December.

Main Proposals

SME – A regulatory authority for micro, small and medium sized enterprises

Rs. 500 million allocated to support small and medium scale entrepreneurs

Paddy prices: Certified price for Paddy. Keeri samba Rs. 50, Nadu Rs 38, Samba Rs 41 (per kilo)

Local milk powder packet price will be reduced from Rs.325 to Rs.290

Government to encourage value additions in the tea sector without compromising Ceylon Tea brand.

Private sector encouraged to step into canned fish business. Canned fish prices will be set at Rs 125

Life insurance scheme of Rs 01 million for fishermen

Rs 1500 mn allocated for each Grama Seva division for rural economic development

02 year tax exemptions for Tea and Rubber producers

Government to encourage value additions in the Tea industry. Special committee to be established to resolve issues plaguing the tea industry

Private sector encouraged to step into canned fish business. Canned fish prices will be set at Rs 125.

Rs. 4000 mn for wild life conservation and to minimise human-elephant conflict

Rs 2000 mn for the eradication of drugs and for child protection

Gem auction to be held in Sri Lanka in April and October each year

Government will introduce National Digital Identity card to set up national digital transaction system

Export processing zones to be managed by Private management organisations

Lubricant market to be liberalised

Special tax concessions for organisations that bring businesses to under developed areas.

No Super-gain taxes in the future

Foreigners granted the opportunity to invest in Sri Lanka through regular banking channels

New investment act to be enacted

Exim bank(export-import bank)  to be set up April 1, 2016

100,000 homes to be built in five  years for slum dwellers. project will be funded by Government and the Private sector

Rs. 500 mn to be used to create a Land Bank which will digitally keep a track of state-owned lands

All hotels should be registered with the Hotels Development Authority by June 2016

Import taxes on garments, shoes, electronics to be revised

 

 

1 Comment for “Government Delivers!”

  1. gamarala

    The largest allocation ever of the budget is for the maintenance of the peacetime army, navy and air force.
    The writer conveniently ignores this !!!
    Why ???

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