Relief to all sectors

Sandasen Marasinghe, Irangika Range and Disna Mudalige

President Mahinda Rajapaksa yesterday in his capacity as the Finance Minister presented a development oriented budget with a large number of proposals to breathe new life to all the sectors.

President Rajapaksa stated that he proposed a wage increase of 10 percent of the basic salary to the public servants by the budget 2012. He said each public servant would receive a salary increase of over Rs 2,500 within 2011/2012. He also stated non staff category will be given this increase from January 2012.

The President said that it is proposed to reduce pension anomalies through the proposals. He granted an additional monthly allowance of Rs 1,000 to those who retired before 2004 and Rs 500 allowance to those who retired in 2004-2006. Half of this sum will be given by January while the balance in July.

The President proposed taking back all non-utilized lands given to the private sector by the government and lease them back to identified smallholder families each with a 2-acre plot to develop. The government has identified around 37,000 hectares of such land that have not been utilized by the private sector. Financial assistance will also be given to those who will invest in them.

President also proposed to increase the tea subsidy given to smallholders for replantation from Rs 250,000 to 300,000 and for new plantation from Rs 50,000 to 150,000. A concessionary loan scheme is introduced at eight percent annual interest repayable in seven years to assist plantation companies to plant and replant.

The commercial banks and private businesses operating at a high corporate level and are financially strong will be permitted to borrow abroad. The income tax payable on joint ventures between tea producers and export companies will be reduced to 12 percent.

President Rajapaksa also proposed to exempt all taxes imposed at Customs on the importation of yarn. VAT and Customs Duty on equipment required to modernize the textile industry will be removed. An inclusive tax of Rs 75 on an imported Kilo of material will be introduced to simplify tax.

It is also proposed to reduce tax if substantial new investments have been made to modernize existing textile factories and to extend long-term tax holidays for related new investments.

The President also stated that it is planned to use Rs 2,500 million to provide services for certain countries, such as, technical assistance and project financing using the expertise available in several ministries.

He said that steps were under way to set up a separate investment promotion zone to direct the private sector towards pharmaceutical production. The income tax on health services will be reduced to 12 percent to promote private health care investments.

The budget also proposed to increase the monthly allowance paid to the elders over 70 from Rs 300 to 1,000 and from Rs 100 to Rs 500.

The Samurdhi Allowance that is being paid in eight slabs from Rs 210 to Rs 615 will be increased to Rs 750 while the Rs 900 allowance will be increased to Rs 1,200.

He proposed to introduce an interest free car loan scheme to enable senior artistes, writers and journalists who have made an uninterrupted contribution of over 25 years.

A Rs 100 million has been proposed to conserve the historic value of the Asgiriya temple which is commemorating its 700th anniversary.

Rs 34,187 million has been proposed to be allocated to provide electricity for nearly 800,000 families to reach the target of providing electricity 100 percent in 2012.

The VAT on the importation on buses will be removed to promote the purchase of new buses to ensure high standards in public and tourist transport.