Pro-growth, pro-people Budget

Finance Minister Dr. Sarath Amunugama yesterday unveiled a development-oriented Budget that also contained a series of measures to benefit the masses burdened by the high cost of living.

Outlining the aims of Budget 2006, Minister Amunugama said the Government has taken the economy forward since it assumed office last year and that the new proposals would continue on the same path.

"The essence of our economic policy as set forth in our policy statement 'creating our future - Building our nation' is to promote a proper, pro-growth, Export Entrepreneur-Friendly Economy. This will help us to place our economy on a growth path of six to eight per cent that will help us to attain Millennium Development Goals within the next 10 years. That is the period that I have recommended to this Honourable House to be declared as Sri Lanka's Development Decade," he said.

He said the Government faced enormous economic challenges as a result of the tsunami and the world oil crisis.

"We as a nation should not only commit ourselves to rapid development and eradication of poverty but also to ensure that we will not miss this opportunity, as we have missed on previous occasions leaving us lagging behind many other countries."

He said the proposals presented in the Budget would increase Government revenue by Rs.33,495 million, of which Rs.17,800 million is for proposed increases in salaries, pensions and Samurdhi allowances and welfare services.

New revenue proposals have also been introduced to raise Rs.25,050 million over and above the printed budget estimates. Thus Government revenue in 2006 will be Rs.477.1 billion, 17.5 per cent of the GDP. The current expenditure will be Rs. 503.1 billion - 18.5 per cent of GDP. This is a substantial reduction over 2.2 per cent of the GDP in 2005.

"I mentioned last year that I was proud of that Budget because it was a product of a wide consultative process which attracted input from all stakeholders. It was a reflection of homegrown thinking for a variety of our development challenges. I am proud to claim that this consultative process has now become fully institutionalized and embedded into the Budget making process of our country," the Minister added.

"If one looks at the overall economic scenario in the country, I am quite confident that the policy environment is quite conducive for taking our economy towards a six to eight per cent growth path with significant reduction in poverty over the next three to five years. There is a clear silver lining for the future."

He said a crime free, secured living environment as well as our commitment to protect our natural environment should position ourselves in a strong footing in the region. We must be a country which looks confidently into the future and not one which is constantly looking back and only giving voice to grievances.

Budget at a glance

Salary hike for public servants/ pension hike

Liquor, cigarettes up

Motorcycles, mobile phones to become cheaper

Concessions for Homes for Children, Disabled and Elderly

An islandwide school meal programme

An incentive package (credit, seed and fertiliser) for paddy cultivation

Purchasing price of milk to be raised to Rs. 25-30 per litre

A special SME credit scheme

Concessional credit scheme for private bus operators to replace old buses

Rs. 10,000 subsidy for renewable energy connections to rural households

Income tax rate on SME companies to be reduced to 15 per cent.

Duty concessions for income tax payers and Government servants to import personal vehicles

Re-introduction of Stamp Duty