Indian investments to boost Lankan economy

Sanjeevi JAYASURIYA

Sri Lanka could benefit from massive outward remittances from India to boost the investment level, said Indian High Commissioner in Sri Lanka Ashok K Kantha.

India and Sri Lanka will further improve on its closer economic partnership with the right policy framework. There are positive signs of recovery in respect of trade between the two countries. The prospects and opportunities are real, the High Commissioner said.

He was speaking at the 171st Annual General Meeting of the Ceylon Chamber of Commerce which was held yesterday in Colombo.

Sri Lanka and India have to grow in the scenario of globalization. The emerging economies will take the lead role and Asia will drive the economic growth. We need to leverage globalization advantages and build closer integration with open and liberal trade policies to capture markets, he said. Over 50 percent of global trade is from regional trade agreements. South Asia is a more vibrant region in economic growth and robust reduction in poverty line. Sri Lanka and India are well placed to derive greater advantage in globalization process. Closer economic integration in the South Asian region is vital.

India and Sri Lanka recovered from the global crisis and are poised to accelerate economic growth. The forecasted growth for Sri Lanka for this year is 7 percent while India will be looking at a growth rate of 9.5 percent. India planned to have a US$ two trillion economy by 2016 where it will be an engine of global economic growth.

Ceylon Chamber of Commerce Chairman Dr. Anura Ekanayake said that the recent mini-budget for 2010 articulates a policy framework which addresses many issues including taxation, ease of doing business and allowing private higher education.

With two consecutive quarters of high GDP growth of 6 percent and 7 percent in Q4 in 2009 and Q1 in 2010 Sri Lanka is now on a high growth trajectory. The recession is clearly a thing of the past. The tourism, agriculture and fisheries sectors showed an immediate and positive response to the end of the war. Other sectors should follow with the right policy environment.

Sustaining and even bettering such high rates of growth requires a sharp increase in investments which is needed to increase from 25 to 40 percent of the GDP. The single digit inflation, reduced interest rates and improving customer confidence are reasons for optimism, he said.