Inflation drops : Effective financial management

Uditha KUMARASINGHE and Irangika RANGE

State Revenue and Finance Minister Ranjith Siyambalapitiya told Parliament yesterday that the inflation rate has gone down to 7.6 per cent last month due to the pragmatic financial policies implemented through the Central Bank.

"It is significant that the Government has successfully controlled the inflation rate to a single digit of 7.6 per cent in comparison to the 28.2 per cent recorded in June 2008.

The Minister further said that Sri Lanka was battered by a high inflation rate for a long time and it is a remarkable achievement by both, the Government and the Central Bank in its effective financial management.

The drop in the inflation rate will spur the economic growth rate he said.

Meanwhile, the Government has introduced the special incentive package to protect the registered financial companies and leasing companies despite the challenges posed by the world economic and financial crisis. It is estimated that the cost of this project would be Rs. 4250 million.

It is our responsibility to provide financial assistance for both registered financial and leasing companies as the maintain a 9 per cent contribution to drive the economy," the Minister added.

Following a discussion held by President Mahinda Rajapaksa with heads of registered financial and leading companies the incentive package was introduced," he said.

A number of financial and leasing companies are operated all over the country maintaining a huge customer network. Therefore, trust of the people on these companies should be consolidated. "That is why the Government intervened to introduce this package which will prevent the negative impacts posed by the global financial crisis to both of these sectors. "This move will also protect the liquidity rates of both financial and leasing companies, he said.

Meanwhile, the proposals of the package are expected to be implemented through the Lanka Puthra Bank.