Budget will consolidate fiscal process - CB Governor

Hiran H.Senewiratne

The Budget 2008 will consolidate the fiscal process and will strive to increase Government revenue and contain recurrent expenditure, Central Bank Governor Ajith Nivard Cabraal said.

“Sri Lanka’s economy is reasonably growing notwithstanding the tsunami, drought, and other external pressures like oil shocks. Therefore Sri Lanka was able to grow at an average of six per cent last three years,” Cabraal said at a post budget seminar on “The Sri Lanka Economy: Perception/ Claims Vs Reality, organised by KPMG Ford Rhodes, Thornton.

He said this new budget would balance to build a regional development economy, which will be able to build a

 sustainable growth in the long run.

The country was able to register growth in every sector and most important thing that the service sector was growing remarbley in the last three years. With these development the private sector is has become more vibrant which is the healthiest feature to promote business and investment opportunities in the country.

The Central Bank Governor said Sri Lanka’s direct foreign investments, which has tremendously improved last three years. This year the Government expects to touch the US $580 million direct foreign investments and in 2008 it is estimated to touch US$ 780 million worth of investments.

Further our forex reserves have reached US $3 billion and our country’s investor confidence is improving despite the conflict situation in the country, he said. Cabraal said that Sri Lanka is in the next phase of the development in the world with the diversification of the export sector in the country and this budget has given priority for the export sector and increase productivity in the long term.

He said Sri Lanka’s inflation is high but they are in the process of addressing certain deficiencies in the inflation-commuted methodology compared with other countries in the world. ‘This year’s budget the defence expenditure has been increased by 20 per cent which is one of the lowest when compared with other countries in the region, he said.

He said that Sri Lanka service growth in the service sector is remarkable and the end of this year 50 per cent of the population will have some way of telephone connectivity. Even in the banking and super market sector has a visible growth in the country, Cabraal said. Meanwhile, the business leaders who attended the forum expressed their views to the Daily News Business on yesterday’s budget.

Chairman DFCC Bank, Nihal Fonseka said the budget has a policy direction for the businesses to grow, which is a positive sign. Further, there is nothing surprising and no challenge for the business organisations in the country. Fonseka also the Chairman of the Securities and Exchange Commission said it has put up a clear direction where the business organisation should stand.

CEO Union Assurance Marina Tharmaratnam said that it is a positive budget with a clear direction and is consistent. She said the most important thing it that it promotes regional development in the long-term perspective.

Chairman the Ceylon Chamber of Commerce Mahen Dayananda said that the budget is by and large is a private sector comfortable budgets with no heavy other impositions apart from taxes.

He said that generally there is no significant negative factors and most important thing is that it has given more emphasis on eastern development activities.

President of the Institute of Chartered Accountants Yohan Perera said the 2008 budget is given priority for infrastructure development and cross border investment.

The Senior Partner KPMG Ford Rhodes, Thornton and Company Rajan Asirvatham said this budget imposed various taxes, which is a complicated to the taxpayer. He said that having a one or few tax systems is easy and convenient for everybody, he said.

Pix by Saliya Rupasinghe