'Implementation of budget proposals - a prime requirement'

by Chandani Jayatilleke -

The budget 2006, presented in Parliment on Tuesday contained many benefits to support the masses and to encourage a development-oriented economy, a cross section of representatives of the business, industries and banking sectors told the Daily News.

However, they reiterated the need for the efficient implementation of the proposals, if the country is to move on with the expected benefits.

Excerpts of the interviews:

Renton de Alwis - former university lecturer and the chief of YEN said that in a budget presented at a time of an election and in the culture of promises, it is a good thing that the budget has given a backing to resource allocation.

The proposal to reduce the income tax rate on SME companies is a good thing. And also the concessions that have been proposed to benefit the entire SME sector are quite encouraging.

"I personally, hail the proposal to increase the prices of liquor and cigarettes. The liquor culture always has a negative impact on our society. Many people remain poor and indiciplined as a result of consumption of liquor. People, specially poor communities waste money on liquor which could be saved for their future," de Alwis said.

On the negative side, I believe the budget has proposed too many subsidies, which will lead to a high rate of inflation. So that there should be high production and productivity levels of goods and services to control the high inflation. If not that will be a major concern, leading to many other issues such as inflation.

Hasitha Premaratne - Stock Market Analyst said that overall it is a development-oriented budget. The many proposals in it are quite impressive. The budget has highlighted various encouraging proposals for the tsunami affected people and for developing the country's infrastructure.

There are initiatives which would counter macro economic issues. The budget also addresses some of the needs of the SME sector which is a positive thing to encourage local industries. There are lot of taxes which have been eased to cater to many industries. And the agricultural sector has also given some benefits. The proposals certainly would have a positive impact on the stock market.

He said that even last year's budget proposed several impressive initiatives. Yet many of the proposals did not materialise due to various reasons.

"What is important is to implement the proposals without any delay and in an efficient manner. We need proper guidelines and targets to achieve a significant economic growth, while benefiting the masses.

On the negative side, the increase of direct tax rate for the corporate sector would be a disappointing thing.

However, Premaratne said that too many benefits and concessions and subsidies may lead to unnecessary problems. "And the budget has proposed too many subsidies," he added.

Rangith Hettiarachchi - Immediate Past President of the Ceylon National Chamber of Industries (CNCI) said that from an industrialist's point of view, the budget presented on Tuesday is positive.

"The incentives allocated for provincial development is an encouraging move as there should be a major drive to develop economic activities in the under-developed areas.

There are some duty reductions for raw material for industries, which is another good point. However, we need to get a further clarification on this proposal. The budget had also hinted at possible power projects which is a critical need in our country. We have to make a lot of effort to address the power and energy issue at the earliest to see a booming economy in this country. We need to get out of the 'power' issue, Hettiarachchi said.

He also praised the incentives and salary increases for the public sector employees.

"However, the public sector employees' productivity and efficiency should be increased to a high level if the Government really wants to encourage the growth of the private sector. The inefficiency in the public sector has a negative impact on private sector development.

Nawaz Rajabdeen - President, Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) said that it was a budget with a difference.

This budget will be a long awaited dream of our affiliated 48 chambers in Sri Lanka for the regional and district development that we have always supported. We are very happy that a practical approach for a positive development plan spelled out in the budget 2005, had been adopted with special emphasis on rural SME development, agriculture, industry and animal husbandry.

These are few of our requests made for the budget proposal of 2005. This is the only way to uplift the rural poor and generate self sustainable development.

This budget not only addresses the development process but also gives attractive incentives for tax payers by giving recognition in society. This is a budget of a decade with mixed development specially for the local entrepreneurs, special tax concessions and financial support for implementing the dreams of the entrepreneurs.

FCCISL is happy that the budget is on the road for development addressing all sections giving confidence and encouragement specially to the rural poor.

We are happy that for the first time a series of honest development plans are introduced such as infrastructure development, agriculture, housing development, livelihood development, restructuring the handloom industry, important development of fishing industry, setting up of crafts villages to help the skilled craftsmen, construction industry, skills development, rural electrification and many other development plans.

Rienzie Wijetilleke - Chairman, Hatton National Bank said that it is a good budget and the Finance Minister has been able to present it in a professional manner without making unrealistic promises similar to those mentioned in the Mahinda Chinthana.

"Overall, I think that the 2006 proposals are quite good even if there is a change of the Government, the new party will be able to implement the proposals with slight adjustments."

Asoka de Z. Gunasekera - Former President, National Chamber of Commerce of Sri Lanka (NCCSL) said that the budget can be described as a pro-people, pro-development budget. "But, we are not sure how the budget proposals are going to reflect in the event of a change of government after the elections. However, I would say, it is a fairly thoughtful budget and proposals have been made to improve all sectors.