‘Needed cohesive industrial policy’
Sri Lanka needs a cohesive industrial policy, which encourages and
stimulate the domestic industry said Ceylon National Chamber of
Industries (CNCI) Chairman Newton Wickramasuriya at the CNCI Achiever
Awards ceremony at the BMICH on Friday.
ACL Cables PLC Managing Director Suren Madanayake receiving the
Manufacturing sector National level Extra Large category Crystal
Award from Export Development and International Trade Minister
G.L. Peiris. Ceylon National Chamber of Industries (CNCI)
Chairman Newton Wickramasuriya and CNCI Achiever of Industrial
Excellence 2009 Organizing Committee Chairman Sunil Liyanage
look on. Picture by Saliya Rupasinghe
He said that the Government must consult the relevant Chambers to
formulate an appropriate policy as the CESS has been introduced
arbitrarily. Although the duty on raw material is low, the effective
rate becomes very high with the addition of several other tax components
such as CESS, and other taxes. For instance, a raw material which
attracts a tariff of 2.5 percent of CIF, the total comes to 38.240
percent of CIF at the port itself ,when all the taxes are charged
including the VAT.
This makes products manufactured locally prohibitively expensive and
compels the public to look for cheap and poor quality products, he said.
Wickramasuriya proposed that the duty components of other intermediate
materials should be reduced if the CESS is going to be a perment
feature. He said that investment relief should be granted for new plant
and equipment particularly to develop the industries in the North and
He said that the tax holidays have not generated much benefits to the
industrialists hence more emphasis should be made to upgrade the
technology by introducing incentives for capital development so the
productivity could be improved.
High tech heavy engineering industries should be encouraged to invest
in the country and then only the feeder industries can be developed
specially in the SME sector. The industries available in the country
under BOI are low tech labour intensive and the country does not have
many knowledge based industries. Basic industries such as the foundry
and metal finishing industry are already dead, he said.
Wickramasuriya said that the CNCI does not support the Comprehensive
Economic Partnership Agreement with India without sorting out the
difficulties arisen with regard to the local industry.
He said that many entrepreneurs are investing in some industries
which are already saturated, resulting in unnecessary price wars and
finally financial losses. As such at a time when the capital available
for investment in the country is not very high, wanton waste of this
scarce resource should be avoided. A State institution like the
Industrial Development Board should monitor the market and prepare a
list of saturated areas, in advisory capacity to the potential
investors, he said.
The Minister of Export Development and International Trade G.L.
Peiris was the Chief Guest at this event.