Significant aspects of Budget 2009
Raja Arabewela
Asignificant feature in the Budget for the year 2009 is the massive
Defense expenditure. The President wishes to do this to “establish a
stable economic environment to restore democracy, consolidate human
rights and achieve economic development as a priority need”.
President Mahinda Rajapaksa presenting the Budget 2009 |
The Government obviously expects, to finish the war soon, to hold
Provincial and Local elections, to establish democracy in the North and
to start on long overdue development work.
Apart from the ups and downs of the various taxes, a highlight in the
budget is the reduction of fuel prices. Here, the reduction of Rs. 15
per litre from petrol may not have a big impact on users but the
kerosene and diesel users and the society in general, could feel the
reduction should the benefits trickle down as expected. Although the
Government expects a 25 per cent reduction in bus fare, the bus
operators are already up in arms against it.
It is interesting to see how far they can go down with the effect of
increase in taxes of other needs of the trade. Even the cost of most
goods could and should go down with the lower transport costs. But
again, people will have to keep their fingers crossed and hope for the
best.
It is the earnest hope and expectation of the general public that not
only the bus and train fares to go down but also a reduction of the cost
of almost all the consumer items due to the lowering of the diesel cost.
There again it is a matter to see how the interference of import and
other taxes may come in to play.
The reduction of VAT from 15 per cent to 12 per cent of course will
give a boost to the sectors like tourism, construction, industries,
telecommunications, insurance and leasing etc. The soldiers engaged in
action, Government servants and the pensioners are given a boost by the
increase in cost of living allowance and the salary advances. The levy
of import taxes on a wide range of goods may have a considerable effect
of the consumer. While some levies may affect the general consumer, the
others may affect only the consumers of ‘luxury’ items.
Some of the goods affected include imported food items like fruits,
vegetables, milk powder, sugar, chocolates, biscuits, grains, salt,
maize, animal feed etc, leather goods like shoes, bags, belts etc,
readymade clothes like, sarees, sarongs etc, household goods like fans,
fridges, air conditioners, ceramic ware etc, rubber goods like bus and
other tyres, and polythene and plastics.
The Nation Building Tax of one percent too could add to the woes of
the consumer.
According to the government these taxes are imposed in order to
reduce imports and to encourage local industries. It is a matter to see
how this import restriction may affect international trade. But, if
local farmers and industrialists take advantage of this situation and
take steps to increase local productions it could have long term
benefits to the country as a whole.
The Government says that this budget is aimed at defence,
establishing peace and industrial and social development.
The Governement expects people to grow more and produce more
agricultural and industrial goods when the existing prices go up. The
Government hopes it inevitably will be so, as and when the people see
the opportunity.
Meanwhile the Opposition says it is ludicrous to believe so without
establishing the right environment by doing the ground work necessary
for such development. Again, that is because they are the opposition.
So it is left for the common man, the consumer to wait, observe and
experience the outcome of these proposals of this budget. |