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Friday, 9 November 2012 03:34 - - {{hitsCtrl.values.hits}}
President Mahinda Rajapaksa Government’s 2013 Budget yesterday drew a mixed response, with some hailing it and others writing it off.
Whilst most chambers of commerce are due to make their views public today, the initial take from the private sector is that given the challenging local and global conditions, the 2013 Budget was good or above expectations.
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| President and Finance Minister Mahinda Rajapaksa gestures as he walks in to Parliament to deliver 2013 Budget speech - Pic by Krishan Ranasinghe |
As predicted by the Daily FT, Budget 2013 has focused on import replacement, exports and new economic sectors.
Others labelled it as overambitious and that implementation was key, while some said it was basic, implying it wasn’t either good or bad. There was also a view that the 2013 Budget, the fourth since the end of the war, was highly populist with many promises – hence implementation being key.
The main Opposition UNP and other parties (see page 2) jeered at the Budget, saying it lacked real substance and had no tangible benefit to the ordinary man, already reeling from rising cost of living and lack of income opportunities.
The more independent observers described Budget 2013 as “spirited and encouraging” despite the Government having lesser fiscal comfort to be generous. Another group said the most welcoming feature was that there was no rolling back of some of the good measures and reforms announced and implemented in the previous Budget, though the Government may have been forced or tempted, given the difficult conditions.
However, akin to playing to the gallery, Rajapaksa’s Budget had a tone of “tax the rich and the vice” though in the case of the former, some measures will have an impact on the middle class and urban folks.
For economists, the most heartening was the expressed path towards fiscal discipline and consolidation and other measures to improve macroeconomic fundamentals, though it was highly challenging. There was greater expectation of the Budget unleashing a new wave of reforms and the level announced in Budget 2013, according to some analysts, has fallen short from desired levels.
To the Government’s credit and perhaps signifying that widespread stakeholder consultation prior to the Budget has been beneficial, almost all key sectors of the economy have been considered irrespective of whether the announced measures are substantial or minute.
The list of economic sectors covered in Budget 2013 is exhaustive (see box) and some commended the Government for its spirit and mindset, apart from showing the way for the politicians.
In particular, setting the goal of a poverty-free Sri Lanka by 2015 and aiming for a value-creating economy came for praise. Others welcomed the extra emphasis on education and health in addition to covering a wide spectrum of socioeconomic aspects.
Some proposals in Budget 2013 were an extension or furtherance of those initiated in the previous year. In that context there has been welcome continuity and consistency.
President Rajapaksa in his presentation was emphatic and confident, showing he was unfazed by criticism over bad governance from the Opposition and certain sections of the civil society.
