A development-oriented budget for people’s uplift
Sandasen Marasinghe, Irangika Range and Disna
Mudalige
Budget at a glance
- 10% salary hike for public servants
- Rs 100,000 at birth of third child of Security Forces members extended
to Police
- Monthly payment of Rs 750 to each parent of Security Forces member who
laid down his life for country
- Rs 1,000 pension increase
- Rs 1.2 million interest free loan to artistes and journalists to
purchase vehicles
- Subsidy to tea smallholders increased Rs 50,000 to Rs 150,000
- Rs 1,000 allowance for elders over 70
- Salary anomalies of university academic staff to be resolved
- VAT, Customs Duty off on lorries and trucks
* Supporting a caring family
* Ensuring food security
* Empowering a healthy generation
* Creating a Knowledge Society
* Boosting an enterprise economy
Post war economic recovery and long-term plans for improving the
quality of life of the people were the main themes of budget 2012
presented by President Mahinda Rajapaksa in Parliament yesterday.
Accordingly, a significant increase in budgetary allocations were made
to the relevant ministries towards realizing these objectives, such as,
Education, Higher Education, Economic Development and Health.
The tourism industry which plays a major role in the development of
the country was also given a huge boost with tax concessions and other
incentives to attract investors to this vital sector.
The 2012 budget has also proposed five-year tax holidays on all
capital investments made by Sri Lankans returning from abroad.
Among the incentives granted to investors is a 6-12 year tax holiday
for investments in the range of Rs 300-2,500 million. Incentives to
encourage the expansion of existing enterprises will also be granted.
The President also announced relief for public servants in the form
of a salary hike of 10 percent of their basic salary.
The non-staff category will be given this increase from January 2012.
The President said that he proposed to make relevant amendment to
reduce upfront cost incurred on account of importation of related
machinery and equipment.
President Rajapaksa said that steps will be taken to develop assets
that were vested back in the government by the recent Act passed in
Parliament to ensure that these assets are put into productive use.
Steps will be taken to develop such assets with the involvement of the
private sector while also rectifying the mistakes made in the past.
“There are many challenges when it comes to strengthening the public
enterprises which have been neglected over a long period of time. One
challenge is to find competent and professionally qualified persons to
manage such enterprise.
The President said while maintaining public investment at around 6 to
7 percent of GDP during the next six years, private investment will be
incentivized to reach 26-28 per cent of GDP by encouraging priority
sectors to engage in more export oriented and import replacement
activities.
He also said that he proposed to provide incentives for manufacturers
and new investors to invest in such fields.
He said that the country’s health indicators are on par with those of
developed countries and it is a major accomplishment. He also proposed
that staff grade officers to be given a five percent salary increase
from January and further five percent salary increase from July 2012.
He said that the allocation on health at national and provincial
level in 2012 through Western and Indigenous medical services is Rs. 105
billion.
President Rajapaksa also proposed a sum of Rs. 95 billion towards the
uplift of primary and secondary education. The development of 1000 high
quality secondary schools and over 5000 primary schools connected to
these secondary schools come under this project.
The President proposed a system through which children will be
selected from G.C.E Advanced Level, either to enter university or to
pursue skills development, so as to ensure that all children will get an
opportunity to develop their skills. The budget also proposed Rs 8,617
million be allocated for vocational education.
The budget 2012 also proposed to allocate a sum of Rs 500 million to
undertake special accelerated vocational education programmes on a
priority basis in the field of tourism, IT, construction and beauty
care.
The budget also proposed to make an additional allocation of Rs 300
million to construct permanent quarters for the security establishment
and to improve human resources development of the Forces in addition to
Rs 230 billion allocated for the Security Forces in the budget.
President Rajapaksa also proposed to extend the application of the
proposal that he announced in the last budget to grant Rs 100,000 at the
birth of the third child of any member of the Security Forces, to those
who are serving in the Police Force as well.
He also proposed a monthly allowance of Rs 750 to each parent of
members of the Security Forces, including the parents of valiant
soldiers who sacrificed their prime age for the country. President
Rajapaksa added that the members of the Security Forces are involved in
demining, rehabilitation of affected areas and urban development related
work to the value of around Rs 5,400 million. With regard to the online
visa arrangement, President Mahinda Rajapaksa said that, there will be
no fee charged on a tourist who spends 48 hours within island and no
visa fee will be charged from children to promote family travel.
To help the Small and Medium Scale Industries, the President proposed
that the Bank of Ceylon, People’s Bank and the Regional Development Bank
each sets up an SME bank branch in all districts within 2012 . The
President invited all other banking and financial institutions to also
set up such branches in all districts.
He said he proposed to reduce the prevailing income tax rate from 28
percent to 24 percent for the interest income from such banking and
other fee levying activities. A 50 percent Government Guarantee will be
given to those banks providing loans to restructure, SMEs to improve
their performances.
“Budget deficit we have to manage during the year 2012 is Rs 469
billion. This is 6.8 percent of GDP, whereas it was 8 percent of GDP in
2010. Since virtually the entire budget deficit is on account of
development and welfare expenditure, I believe that it will contribute
towards long-term development of the country while addressing many
facets of poverty,” he added.
The President called on the Opposition to support the government when
steps are taken in the interest of the nation.
“The tendency of those in the Opposition parties to work in separate
groups is not healthy for the country. They should stand by together for
the political vision of their parties, while setting aside personal
differences and being humble and mature enough to rectify any wrongs of
the past. |