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| Saturday, 20 November 2004 |
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Budget 2005 | |
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| Budget for the people from the people's Government The United People's Freedom Alliance Government yesterday unveiled a pro-people budget with a special emphasis on reducing the cost of living and rejuvenating the economy through developing local industry, fisheries and agriculture. "I am proud to say that the budget I am presenting today is the product of a wide consultative process, which attracted inputs from almost all stakeholders. It is based on a homegrown economic development strategy," Finance and Planning Minister Dr. Sarath Amunugama said, presenting the budget. The budget raised the public sector salaries by 40 per cent and pension payments by 15 per cent. VAT was reduced to five per cent on essential foodstuffs, which is expected to bring down the prices of several items including dhal, milk powder and dried fish. VAT was increased to 18 per cent on liquor and certain luxury items. The Budget also allocated Rs.450 million for the Samurdhi program to develop micro enterprises and self employment projects for Samurdhi beneficiaries, in another move aimed at poverty alleviation. Tax incentives will be granted to small-scale industrialists, farmers and fishermen. Several measures to broaden the tax net were also announced to increase Government revenue, as tax compliance remains unsatisfactory. Fines for motor traffic offenses and a several other penalties were also raised sharply. Development of religious activities, incentives for small exporters and gem and jewellery industry, modernisation of small and medium paddy mills, a film academy, export development, software, export and business outsourcing and SME banks and off shore shopping villages, incentives for fishermen, a new university for Uva Wellassa and hostel facilities for the Rajarata University are some of the other proposals. Minister Amunugama said the proposals outlined in the budget will increase Government expenditure by Rs.19,463 million and Government revenue by Rs.27,935 million. Total Government revenue in 2005 will be Rs.389.5 billion. The Minister said the Government expected to maintain inflation around 7 to 8 per cent and a medium rate growth target of 6 to 7 per cent of GDP. He said the Budget was built on "seven pillars" which included enhancing effectiveness of public financial management, improving access through infrastructure at provincial/national levels to attract public and private investment, reducing poverty through rural sector development and employment creation and promoting a caring society and respect for cultural and religious values, leading to a stable democratic society. Dr. Amunugama observed that the Government has been able to provide all these benefits despite the twin economic crises of the drought and the steep rise in world oil prices. The Minister outlined several benefits of the Budget including: employment of 41,305 graduates from January 2005, 30,000 openings for A/L qualified youth, the proposed SME Bank will lad to the creation of 25,00 new jobs, 10,000 entrepreneur village program will lead to employment for 30,000 people, foreign employment will be raised to 1.5 million. The Budget 2005 contains incentives for housing, floriculture, organic products, dairy industry, cinnamon industry, ribber cultivation, foundry industry, prawn farming, fruit and vegetable farms, plantations, construction industry, advanced technology, craft products, export development, paddy mills and the gem and jewellery industry. Several development programs were also announced for Uva and North Central Provinces. Hostel facilities for the Rajarata University and building facilities for the Eastern University are also included. "The strength of this nation lies uniquely within. The policies we develop will take advantage of our competitive strengths and pro-actively plan the development path based on our culture, resources and regional dynamics. "It is time to look ahead and convert strategies into action and make genuine progress towards sustainability for the benefit of society, environment and creation of wealth in Sri Lanka," the Minister concluded. |
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