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Money-gobbling State institutions hampering infrastructure development - Enterprise Development Minister



Minister of Enterprise Development and Investment Promotion Dr. Sarath Amunugama addresses the conference.
Picture by Sumanachandra Ariyawansa

EXPENDITURE: The expenditure incurred by some State institutions prevents the Government from allocating more funds for the country's infrastructure development projects, Minister of Enterprise Development and Investment Promotion, Dr. Sarath Amunugama said at the national conference on Policy Constraints, Regulatory Barriers and Regional Economic Development held yesterday in Colombo.

Addressing the conference, the Minister said that institutions such as the Ceylon Electricity Board, Ceylon Petroleum Corporation and the Railway Department absorbed a large amount of funds for their day-to-day operations. Per day, CPC derived funds which the Government could invest in constructing a general hospital.

Lack of infrastructure development has paved the way for regional disparities in the country. The Western Province has shown a 12 per cent growth while other regions showed poor growth due to lack of infrastructure. A double digit growth rate is the norm in Asian countries but Sri Lanka still remains at an average of over 5 per cent growth.

Sri Lanka needs to accelerate transport, power, social and other infrastructure development projects. If the country could expand the power sector by 10 per cent Sri Lanka could rapidly gain a double-digit growth rate , the Minister said.

Most of the power projects in Sri Lanka do not work efficiently and there is nearly a 25 per cent of shortfall in generating power for these projects. The country needs to focus on mini hydropower projects, funded by the private sector to strengthen the local power supply, he said.

Provincial Councils (PCs) have a vital role in developing regional economic growth. PCs need to attract investors to their respective regions by providing incentives for investors and reducing the unemployment rates in the regions. However, today nearly 75 per cent of the Provincial Council budgets are allocated for settling salaries, Minister said.

Director, Centre for Development Research, Royal Institute, Dr. Wilbert Gunarathne, said that all local businesses are affected by the lack of infrastructure development and this has reduced their competitiveness.

Access to high quality human resources, advanced technology and finance are other barriers faced by local businesses. There is a lack of dialogue with the business community in establishing the policy framework of the country.

The regulatory framework of the country is still outdated and not business-friendly. The country needs to create public-private business forums at district level to address problems faced by local businesses, he said.

The research report on policy advocacy issues of local private sector development was presented to Minister Amunugama during the conference.

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