A fillip for development

There were many pluses in Budget 2008 presented on Wednesday by President Mahinda Rajapaksa, considering the difficult circumstances under which it was presented. Many did not expect such a development and welfare oriented budget, given the constraints and challenges facing the country.

The corporate sector hailed it as a development oriented budget that has wide scope for growth. According to business tycoon Lalith Kothalawela whose comments we carried in our Business Section yesterday the President had presented a “practical and down to earth financial plan that will take Sri Lank to a era of new development”.

The budget also reflected to a large extent the road map for the 10 year Mahinda Chinthana development plan of the President. The accent laid on the development of the local economy and infrastructure development is a clear indication of this.

The prominence given to the newly liberated Eastern province in the Budget is also indicative of the Government’s desire to integrate this Province that has vast potential to the general economic mainstream of the country.

The five year tax holiday offered to investors setting up ventures in the Eastern Province and other incentives we hope will have its desired result. A substantial portion of the funds raised from the sovereign bond issue too is expected to be pumped into the “Awakening East” project.

Budget 2008 has also has many incentives to foster local production such as the VAT exemption for milk and dairy products and the continuation of the fertilizer subsidy would certainly provide an impetus to the national food drive being promoted by the President.

The decision to reduce the VAT on petrol from 15 per cent to 5 per cent in the event of a further increase the fuel price in the world market should be viewed as a redeeming feature vis-a-vis the impact of recurring fuel price increases on the Cost of Living.

The President has also been mindful of keeping the prices of kerosene and diesel steady knowing well the cascading effect of any price hike on essential items which have been exempted from all duty levies.

The decision to set up a separate Company to import essentials and maintain buffer stocks should be considered as a prudent move by the Government to counter exploitation by the private traders who it was observed had failed to make good the promise made to the Government to bring down prices following the concessions granted.

This body should be staffed with competent people who would correctly assess the requirements and above all not leave room for corruption.

The Government ‘s decision to increase Year Five scholarships by another 5000 in order to facilitate the education of the low income groups should be commended. This may perhaps have been spurred by the phenomenal results obtained by an inmate of a refugee camp recently which is a demonstration of the hidden talent in our midst.

Budget 2008 has also not overlooked the much harried wage earner in the public sector who will now have an additional Rs.2500 in his pay packet by way of a COL allowance while pensioners too have been similarly rewarded.

Unemployed graduates too will be absorbed into 15,000 placements next year ending their long agitation. Tax relief granted to film producers too it is hoped would help revive the ailing film industry and see the emergence of quality productions.

For the budget proposals to bear fruit peace is a sine quo non and that is why the President made an impassioned appeal during his budget speech for all opposition political parties join him in the task of rebuilding the nation shedding all differences.

Inherent in the President’s appeal is a popular perception that the country at a decisive phase in its battle against the LTTE and that only a collective effort by all concerned could see through this vital phase keeping the nation intact.

The President has already enumerated the reasons for increasing the Defence allocation and it is hoped that this will not be picked as a bone of contention by the main Opposition to stifle the Government’s efforts.

It goes without saying that any rancour and acrimony between two major parties at this stage could only help those waiting eagerly to destabilise the nation. It is only through a collective effort that the economic woes of the country can be tackled, for the stability derived in this regard can only accrue to whichever Government that follows.

Hence the need for unity at this crucial hour.