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By Chamitha Kuruppu

The Government should focus on formulating long-term national plans which would not be altered with the change of governments when preparing budget proposals, leading business chambers have told the Government.

The Federation of Chambers of Commerce and Industries of Sri Lanka (FCCISL), National Chamber of Commerce of Sri Lanka (NCCSL), Ceylon National Chamber of Industries (CNCI) and National Chamber of Exporters of Sri Lanka (NCE) in their recommendations for the inclusion in the National Budget Proposals for the year 2004 which were handed over last week have highlighted infrastructure development, immediate implementation of anti-dumping laws and amending the existing income tax rate as the most important areas to be given priority in the budget.

Finance Minister K.N.Choksy is due to present the UNF Government's third budget in parliament on November 12.

The chambers pointed out that in order to gain sustainable development the crisis of co-habitation between the President and Prime Minister should be solved. They have called upon the President, Prime Minister, government and the opposition to work in unison towards the national reconciliation and development.

Chamber recommendations for budget proposals highlighted that the expenditure on government ministers and members of parliament should to be curtailed and measures to be taken against waste and mismanagement of public institutions.

The NCCSL recommended that a project office be set up to ensure the efficient implementation of budget proposals. The Project office should review the progress every three months and discus the results with the trade chambers and other relevant organisations.

The chamber said that budget proposals are made to enhance the economic development with the ultimate goal of increasing living standards of the people. However in many instances it is observed that some of the important proposals are not implemented resulting in non-achievement of the targets expected.

NCCSL proposed to remove the holidays in lieu when a national holiday falls on a weekend or on any other holiday. Also to introduce a system which ensures that all Public, Bank and Mercantile sectors have holidays, on the same days.

It was suggested that an industrial rate of power at a reduced rate be introduced so that local industries will be able to face global competition successfully.

Among other proposals of the NCCSL are to zone agriculture production in each district and promote import and export of different produce from district to district, encourage through tax incentives the agro-based industries in different districts, include the terminal handling charges into the freight without charging it separately from the shipper and expedite work on construction of the Colombo South Port Project and develop Hambantota initially for bunkering services.

The chamber recommended to increase the efficiency of collection of Customs duty and VAT through strengthening the Customs to prevent under valuation, fake imports and grey imports as well as to take measures to develop a corporate bond market to channel savings to productive investments.

One of the main reasons for the loss of welfare to the saver and also for the high cost of borrowing is the over dependence on the banking sector. The corporate bond market allows direct access to investors thereby removing the middleman cost.

NCCSL also suggested to make raw material that is not locally available free of import duty.

The chamber suggested that the government advises banks and other financial institutions to pass on the benefits of interest rate reduction to the SME sector. It is also suggested that the government take an initiative to introduce a specialised SME bank dedicated to cater only to the SME sector so that the SMEs who have no access to the capital market can obtain loans without collateral, but based on the feasibility of their project proposals.

Although several measures have been introduced by the government to enable banks and other financial institutions to reduce interest rates on loans and other advances SMI sector has not been able to receive substantial benefits, they said.

In the budget proposals, the CNCI pointed out that measures should be taken to overcome the slow phase of infrastructure development. The CNCI highlighted that uninterrupted and low cost of power supply, transport and communication, road and rail, port facilities and allocation of funds for industrial development the most important areas that need to be given priority.

For the improvement of the health sector the CNCI proposed that government health sector reforms should continue at a quicker phase.

The chamber said that in keeping with the government's call to provide job opportunities for unemployed youth, the private sector has faced constraints due to compatibility issues of the recruits in reputed organisations due to the need for training and skills development as well as lack of working knowledge in English.

While downscaling the number of unemployed graduates through public sector programs and the private sector the government should also give priority to education reforms, the chamber proposed.

The need to introduce a Crop Insurance Scheme as well as to ensure a guaranteed price for paddy especially during bumper harvests were highlighted in order to boost the agriculture sector.

The CNCI budget proposals pointed out that promotion of industrial growth is shifting towards Free Trade Agreements at present and due to that the local industry production is forced to compete with comparatively cheaper imports from regional countries and China.

Special tariff on electricity for the industrial sector on par with the electricity cost of regional countries, Ports chargers be reduced and revised in favour of the industrial exports/imports, were also pointed out by the chamber.

Directions to be issued to Urban Development Authority to consider a request by the industrial sector for land allocation on long lease to expand/diversify.

The CNCI proposed that the existing tax allocation of Rs 240,000 per annum should be determined annually based on the cost of living allowance.

The chamber has proposed several measures for the welfare of senior citizens such as introducing a special health insurance scheme and setting up a government maintain endowment fund exclusively for senior citizens to invest their retirement benefits were among those measures.

Among the other proposals of the CNCI are to seek more credit lines from institutions such as IFC and ADB towards development of small and medium scale enterprises, anti-dumping laws to be activated soon, Zero duty on imports on raw materials for industrial exports and Concessions granted to BOI companies should be extended to non-BOI companies.

Increasing government revenue by taxation and tariff and cutting down government expenditure, amalgamating Employees Provident Fund (EPF), Employees Trust Fund (ETF) were some of the highlights included in the budget proposals of the Federation of Chambers of Commerce and Industries of Sri Lanka (FCCISL).

President Nihal Abeysekara told the Daily News that improving efficiency of government agencies and amending the income tax rate were also highlighted in the proposals.

The chamber has pointed out that measures should be taken to overcome the under utilisation of funds, development of infrastructure facilities, introducing laws to prevent dumping and uninterrupted and low cost power supply are also among the proposals.

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