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By Chandani Jayatilleke

The UNF Government's second budget to be presented in Parliament tomorrow by Finance Minster K.N.Choksy will focus on accelerating the key sector in the economy such as agriculture and industries and creating more employment opportunities.

Minister of Rural Economy and Deputy Finance Minister, Bandula Gunawardene told the Daily News that the Government's aim is to present a development-oriented budget without heaping more burdens on people. However, he said that the 2002/2003 fiscal year will be the most difficult, hinting that much relief cannot be expected from the budget 2003.

"We will present a set of budget proposals which are aimed at reviving the economy. As 2003 is declared as the Year of Employment, much emphasis has been given to create a large number of employment opportunities," Gunawardene said.

The aim of the Government is to keep the budget deficit at around 7.5 to 8 percent of GDP by non-inflationary methods. Government borrowings are estimated at Rs. 350 billion and the revenue targeted for 2003 is Rs. 317 billion.

Several business leaders told the Daily News that they expected a budget which will induce development activities in the key sectors while attracting foreign direct investment. "The Government should seriously consider the grievances of the small and medium sector industries in its budget proposals," President, Sri Lanka Chamber of Small Industries, Aloy R.Jayawardene said.

The Government should formulate a policy to protect small industry from competition by large industries and from imports. "In India this was achieved through a 'Policy of Reservation' introduced in 1967. Under this, a list of items is exclusively preserved for the small industry. Over the years these have increased to over 830. Import substitution policies of the Indian Government have not only protected small industry but also larger industry from direct foreign competition," he said.

SMIs in India are provided market support through Government procurement Policies with exemption or concessions from production by small industrialists. Sri Lanka can follow the systems in India in this connection, he said.

Managing Director, Hatton National Bank, Rienzie Wijetilleke said that Government should give relief to small and medium sector industries.

Vice President, Federation of Chambers of Commerce and Industry of Sri Lanka said (FCCISL), Nihal Abeysekera said thought the Government has achieved certain milestones in the economy and the peace process, the real growth is yet to be seen. "We need to accelerate economic activities and build investor confidence to bring in more investments in key areas of the economy.

President, National Chamber of Commerce of Sri Lanka (NCCSL), Chandra Embuldeniya said that the Government should declare a three-year SME Development plan. "This sector needs specialised support and funds."

The Government earlier called for proposals from the private sector, the business community and the academia aimed at incorporating some of them in the 2003 Budget and the chambers and other business organisation submitted their proposals to the Treasury accordingly. Business chambers proposed to correct tax systems and provide benefits to revive local industries in their proposals.

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