Rs. 16b economic stimulus package

Jayamapthy Jayasinghe

An economic stimulate package has been announced by the government from midnight yesterday to kick start the industrial growth which has been affected by the global economic recession.

Enterprise and Investment Promotion Minister Dr Sarath Amunugama said the government has granted concessions to the agricultural, Industrial and the service sectors for the benefit of consumers.

He said the government was envisaging wide spread concessions for the Tea and Rubber sectors including provision of one months working capital loans for tea factories from commercial banks at concessionary rates on the recommendation of the Sri Lanka tea board, the maintaining of a CESS for tea imports and restricting imports of sub standard tea to Sri Lanka, supply of tea to be purchased by state trading institutions for exporting to countries like Iran and Russia.

The government will supply mixed fertiliser at Rs 1000 to small tea holders to bring down their cost of production.

The next concession is to suspend the recovery of loans extended to tea factory modernisation under plantation development project for a period of one year. To impose a 2 per cent extra CESS when tea prices fetch over Rs 300 a kilogram and using it for subsiding fertiliser cost.

As far as the rubber industry is concerned the government will ensure a rubber grower a price of Rs 150 a kilogram. There will be a suspension of VAT from rubber exports and for domestic rubber manufacturers.

For Cinnamon exporters there will be a new scheme in place. For tourist hotels there will be reduction in surcharge in addition to electricity. He said the other important area was the fuel cost where petrol prices will be reduced by Rs 2 per litre. Diesel, kerosene and furnance oil will be reduced by Rs 10 per litre.

Therefore the revised petrol price will be Rs 120 per litre, diesel Rs 70 per litre, kerosene Rs 50 per litre and furnance oil Rs 25- 35 per litre.The government intend to further reduce when commodity prices fall.

The price reduction will have a tremendous impact on the industries. The Laugf gas per cylinder will come down by Rs 276. he said.

Referring to three wheeler taxi drivers he said they will get 75 litres for a month at a controlled price of Rs 20 less than the normal price. However due to subsidy the Petroleum Corporation will be losing Rs 1500 million per month.