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by William de Alwis

Officials of the Finance Ministry and the General Treasury begin pre-budget discussions this week with the Sri Lanka Chamber of Small Industry on recommendations it has made for a strategic approach to the country's industrial development within the next eight years leading up to 2010.

The Department of Fiscal Policy and Economic Affairs which invited the Chamber's recommendations was last week handed a twelve point brief in which the main proposals were submitted for discussion.

Pivotal to the Chamber's recommendations is its position that the small and medium industrial sector should be considered the backbone of the country's economic growth and that it is unmatched as a provider of employment with over 15,000 units in operation countrywide.

One of the first recommendations calls for the setting up of a joint inter-Ministerial Committee with private sector participation to study the status of local manufacture with imported components. A number of industries in this category were unable to compete in the local market as the duty band on imported components was as high as 25 per cent. The duty should be brought down to 10 per cent while that for finished products remain at 25 per cent.

The Chamber also called for action to eliminate unfair trade practices. Among the points made, it called for curtailing the release of BoI products in the local market and leakage from BoI factories, removal of discrimination between BoI and non-BoI industries; harmonising of BoI and non BoI industries; permitting duty free imports for non-BoI exporters too and permitting the import of duty free vehicles for use by Small and Medium industries on the same lines as those applying to the BoI sector.

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