Budget for 2010 today:

Chambers seek industry friendly budget

Ramani Kangaraarachchi

The Government will present a budget for 2010 today. The budget for 2011 will be presented in November as usual. This budget will present policies and principles that will govern the present Government during the current tenure of the President and the Parliament. The Daily news Business spoke to some of the Chamber Heads about their expectations about both budgets.

National Chamber of Commerce of Sri Lanka President Lal De Alwis said the reduction of duty for motor vehicles will lead to improve country’s transport and tourism which is a positive sign.

The tax holiday given to agricultural projects which will end in March 2011 should be extended for another five years minimum because the neglected lands in the North and East are now cultivated and produce such as onion, chillies and potatoes are coming to the market.

“When the prices of those products go down the cost of living of the people will go down and farmers will be encouraged to grow more as they have a good market,” he said.

Alwis said the dairy industry is another area that should get concessions because the country can save a huge amount of foreign exchange while supplying milk to people at a reduced cost.

Dairy farmers should be motivated in a bigger way. He said the energy cost is very high in Sri Lanka.

Although it will come down gradually with forthcoming projects like Norochcholai, the apparel industry depends highly on that.

The EU should look at GSP+ more positively at a time where there is no human rights violations in the country. Investors will also be encouraged if the GSP+ is extended.

If the government can devalue the rupee to some extent the tourism industry will boost up.

The National Chamber of Exporters of Sri Lanka hoped that the Government will continue to supply the fertilizer subsidy to farmers. National Chamber of Exporters of Sri Lanka President Sarath De Silva said the most possible growth sector is agriculture and it is high time to use our own raw material.

“Presently we import raw material and export after value addition. This is not a good sign and it should not be continued when the agricultural sector can be developed. Sri Lanka must now enter a fast phase in growth and industrialists must have their own raw material,” he said.

He said the country is self-sufficient in rice but it is necessary to concentrate on other crops such as fruits and vegetables which consume less water. Large model farms can be set up and utilize our human resource in the north and east in a big way. When the North and East is fully geared the railway can be the main mode of transport.

Ceylon National Chamber of Industries Chairman Newton Wickramasuriya said the Government has already removed duty on all raw material which is a welcome issue.

“We like the Government to simplify the tax structure as it is too complicated and lot of effort has to be taken. We do not request to reduce taxes but simplification will save a lot of time and money while increasing productivity”.

Enhancement of the capital allowance is also expected by the business community. This is required to survive in the highly competitive global arena. Because the technology is advancing and industries have to replace new machinery and equipment more often to be productive. They need more money to do this,” he said.

Federation of Chambers of Commerce of Sri Lanka President Kosala Wickramanayake said this budget will not have a huge impact as it will allocate funds for 2010. He said Sri Lanka can be a shopping hub in the region if duty free electronic items are allowed. Agricultural and tourism also should get government support from the next budget, he said.