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Government Gazette

Budget thrust on development, welfare, local industry

VAT reduced to 12 per cent from 15 per cent

Ranaviru allowance increased upto Rs.5,000

Government servants Cost of Living rises to Rs.4,500

Pensioners to get extra Rs.560

Fertiliser subsidy to continue

Relief for electricity, water consumers

Cess on fridges, fans increased

Allowance for Samurdhi children

Kotte: President Mahinda Rajapaksa yesterday presented the fourth budget of his Government introducing a wide range of people’s friendly proposals aiming to bring down the cost of living burden and achieving long term economic benefits to the country including the development of local industries.

President Rajapaksa presenting his budget introduced proposals to immediately bring down the fuel prices, as widely expected by the public. The President said consideration will be given to make another reduction of fuel in the forthcoming months, if international oil prices stabilise at a lower level.

“The objectives of my proposals was to give every possible relief, that would benefit a majority of the society. Through the reduction of fuel prices, transport fares, electricity and water tariff, VAT and income tax and with the enhanced cost-of-living allowance granted to public servants and pensioners, the working class has been given greater relief.”

He proposed additional cess on imports of many items including refrigerators and garments to discourage imports and encourage local manufacture. “Our policy is to encourage local producers and production. As such, imposition of Cess, introduction of loan schemes and extension services were done to promote local production.”

“Mahinda Chinthana, Ten Year Horizon Development Framework is being widely implemented across the country. The humanitarian operation to relieve the country from the grip of terrorism has reached its final phase.

A democratic environment for a political solution in which the power of all people will be amply strengthened is emerging,” the President said, commencing the Budget speech.

Referring to the economy, he said the country’s GDP has grown by an average of seven percent. The per capita income which was US$ 1,000 in 2004 increased to US$ 2,000 this year. Unemployment was reduced to 500,000 from 800,000. We generated 300,000 new job opportunities. The rural income thereby increased since those who benefited most through these new job opportunities were the youth of such areas.

“We have taken measures to improve Government revenue which was Rs. 331 Billion in 2004 to Rs. 712 Billion this year. Revenue from Income Tax has registered a record improvement of Rs. 143 Billion. This is a favourable trend. We have managed to maintain a Revenue/GDP ratio of 16 per cent. This is despite many concessions provided for oil, essential commodities, raw material and investments,” he added.

As per Budget 2009, the reduction of the price of petrol will pass a benefit of around Rs.500 per month to over 1.6 million motorcycle users and Rs.1,200 to Rs.2,000 saving to all three wheeler and vehicle owners. The budget has also taken measures to reduce the electricity tariff with special attention to industries and the tourism sector due to come down price of furnace oil used for power generation.

The President presenting his budget speech introduced a series of measures for the welfare of the public servants. The budget has increased the cost of living allowance paid to the public servants up to Rs.4,500 with effect from January next year.

An additional provision of Rs.12,000 million has been allocated for this purpose. In addition, the budget has allocated Rs.3,000 million to rectify the salary anomalies in services such as judicial service, teachers service and principles service.

The budget has also proposed to increase the present Rs.3,000 festival advance available to public servants to Rs.5,000. The budget has also increased the Rs.1,000 advance paid to public servants to purchase school books for their children to Rs.2,500.

In order to reduce the cost of living burden on the pensioners, Rs.1,440 cost of living allowance introduced to pensioners has been increased to Rs.2000 with a monthly increase of Rs.560.

Initiatives have also been taken by the budget to pay Rs.500 monthly incentive to the public servants who retire prior to becoming entitled to receive a pension. An additional allocation of Rs.3,000 million has been made for this purpose.

The President in his budget speech paying the highest tribute to soldiers by proposing to increase the monthly allowance to Rs.5,000. A sum of Rs.4,500 million has been allocated for this purpose.

The budget has also proposed to allocate Rs.3,500 million to commence the construction of few more Ranaviru Gammana with all facilities during the next year.

More than 350,000 electricity consumers and 150,000 water consumers will benefit from relief proposals in the Budget. Budget has allocated Rs.300 million for this relief.

The budget has proposed to give a monthly allowance of Rs.200 for the children between the ages of 1 to 5 of Samurdhi and low income estate families to reduce the cost of living of such families and promote the liquid milk consumption among their children. Rs.900 million has been allocated for this purpose.

The President in his budget also proposed to impose a Nation Building Tax as a social contribution towards the welfare of security forces and to rebuild communities and infrastructure facilities affected by terrorism.

In order to further encourage the local dairy farmers, the budget has increased the special commodity levy on imported milk powder imports from Rs.5 to Rs.15 per Kilo.e special commodity levy on imported sugar from Rs.14 to Rs.16 per Kilo to encourage the local sugar industry and sugar cane cultivation.

 

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