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Friday, 10 November 2017 00:10 - - {{hitsCtrl.values.hits}}
By Ashwin Hemmathagama and Skandha Gunasekara
Appreciating the Finance Minister’s steps to keep the Budget deficit low, State Minister of Finance Eran Wickramaratne said that he had done a tremendous job in securing the macroeconomic fundamentals while raising revenue so the State could spend on the essentials of education, health and social transfers.
“He also has managed to keep the Budget deficit low. Also next year is challenging as we will be repaying the highest debt we have ever repaid in history,” he stated
Stressing the importance of investing in human capital, the Minister said the Budget 2018 would ensure that the youth received the highest standard of education.
“The Finance Minister put the emphasis on actually building human capital rather than just hard infrastructure. I think that is the right decision because spending on human capital will give Sri Lanka the edge over countries in the region. So we are increasing our investments in education - three new medical faculties in Sri Lankan state universities, seven new faculties in engineering and digital and ICT; so these are very important. And then for those going along the non-academic route into practical subjects, they are also going into higher education, whether it is mechanical, technical or digital. And every student will have 30 days of education; they don’t have to fall out just because they are not necessarily academically inclined. So we won’t be exporting cheap labour anymore, there will be opportunities within this country and if somebody actually goes abroad they will be skilled so that they can earn much better.”
The Budget also facilitates an increase in women’s participation in the labour force, the Minister said, adding that several measures will be put in place to encourage women entrepreneurship to be further integrated into the economy.
State Minister of Power and Renewable Energy, Ajith P. Perera, lauded the expected development his constituency would receive in Kalutara through the Budget while pointing out that tax concessions in the renewable energy sector would attract foreign investors.
“This Budget will contribute greatly to the development of the Kalutara District. In my district we are going to build the biggest free trade zone in the country. This budget allocated Rs. 2,000 million for infrastructure facilities and this will give the people in the Kalutara District a good chance of having an industry-based economic zone. We are happy and we will definitely establish the industrial zone in the Kalutara District. This is definitely a blue and green budget. It’s the best budget for the renewable energy sector and supports the development of sustainable, renewable projects. This Budget is giving investors in renewables a 50% tax concession on profits which will encourage local entrepreneurs and foreign investors.”
Minister of Megapolis and Western Development Champika Ranawaka also hailed the Finance Minister’s steps to provide relief to the people at a time when the country was tasked with repaying its highest ever debt.
“We have been able to double our government revenue and to bring the balance of the primary account to a surplus. Basically we have been able to cover our basic expenses from our revenue through this Budget. This is a great achievement for the country considering the state it was in. The next two years, 2018-2019, are tough years. We have to pay Rs. 1,900 billion per year on loan repayment. Under such strained circumstances the Finance Minister has presented the Blue Green Economy under a new policy. He has given as much relief as possible. He has paid attention to urban development, and given huge allocations to provide housing for the poor,” said Minister Ranawaka.
The Opposition, however, was critical of Minister Samaraweera’s maiden Budget, with former president and finance minister Mahinda Rajapaksa questioning the Government’s ability to carry out the policies outlined in the Budget.
“They paint a beautiful picture but they don’t show how the policies will be implemented. The Government is now harping on about the expenses in the Government only after jacking up expenses over the past two years in office,” he asserted.
Chief Opposition Whip Anura Kumara Dissanayake claimed that it was another attempt at the failed 1978 open economy policy. “The Finance Minister said that the Government is aiming to continue the open economy that was introduced to the country in 1978. They explained that the liberalisation that was introduced in 1978 is to be taken forward in this Budget. The 1978 approach was to abandon the homegrown self-sufficient approach to depend on foreign investments and foreign markets. Their entire economic plan spelt out in this Budget rests on launching the second innings for the open economy but there are shortcomings in the first innings and they had to admit that today as well,” he stated.
The MP also condemned the proposed tax on bank transactions, charging that it would eventually extend to other sectors. “The Budget outlines that the Government needs to take Rs. 1.89 trillion worth of loans for the next year. For the first time they have introduced a tax to collect revenue to pay back loans. Even though this is only for bank-based transactions at first, this will spill over to affect other fields as well. As has been the case with every other tax, they will develop this tax aimed at collecting revenue to pay back loans and they will develop this to affect other fields of transactions as well,” the MP said.
The Chief Opposition Whip then opined that prevalent corruption within the Government’s ranks would be the undoing of the Government’s economic policies and that his party would be voting against the Budget.
“The Blue Green Economy that Minister Mangala Samaraweera spoke of will not be possible with the blue thieves, and that is what the Budget displays to us. It is the position of the JVP that this Budget should in no way be passed by Parliament.”
Being critical of the Budget proposal presented yesterday, Joint Opposition strongman Keheliya Rambukwella said that the Government’s policies lacked clarity.
“There’s no clarity in what their policies are or what is to be expected.”
Meanwhile, JO MP Namal Rajapaksa took to Twitter to criticise the proposals, questioning the Government’s capacity to implement the policies presented through Budget 2018. “The Government failed to fully implement last year’s Budget. How can anyone trust that they’ll implement this one?”
