Focus on promoting local industries

THE BUSINESS DESK

President Mahinda Rajapaksa presented the Government’s third Budget for 2009 with a lot of promise on long-term development of the economy yesterday.

Budget analysts said import substitution, preserving foreign currency and promoting local industries were the underlining themes of this year’s budget.

The fuel reduction came in for praise from industrialists, hoteliers and entrepreneurs. Analysts say this would have a major positive impact, and would lead to the further reduction of inflation.

The proposals aimed at infrastructure developments too were commended.

Local confectionery manufactures were also happy with the proposals to impose taxes on imported candy. This will discourage importers and increase the quality of local biscuit manufacturer even further to suit the demand, analysts said.

Partner Gajma and Company Chartered Accountant N. R. Gajendran commenting on the budget said the Government has not made any major changes on the Government’s fiscal policies and he said it is a commendable endeavour.

He said that basically in 2008 the revised estimated revenue was Rs. 850 billion. But in 2009 the estimated revenue has come down to Rs 709 billion, which was a Rs. 40 billion drop compared to last year.

Gajendran said the total expenditure for 2008 was Rs one Trillion and 44 Billion while it has come down to Rs 1 Trillion and 16 Billion showing a dip in expenditure of Rs 24 Billion under the 2009 Budget.

Gajendran also said based on the budget, our deficit was seven per cent last year while the 2009 budget has been able to maintain the deficit at seven per cent. It is commendable that the Government has cut down on Government expenditure.

He said with the current global scenario, the Government has to have a revolving Budget to address unpredictable shocks.

He said this Budget has proposed a lot of import levies to assist the local SME sector, which is also commendable.

Deputy Chairman of the Institute of Post Harvest Technology and The Vice President of National Chamber of Exporters and also co-Chairman of NCED Sarath Silva said they presented important proposals to the budget with the intention of increasing agri production and in the process of bringing down the importing foods which amount to 73 per cent of the export revenue earned by Sri Lanka on exports of plantation crops. “I find budget has sincerely attempted to address these issues but the actual impact will only be seen on the implementation of these budget proposals. In my past experience, the department concerned delayed in the implementation process but I believe these are vital issues.

This time the implementation will be swift and fast. With these we would support the green revolution which the country expects, he said.

Sri Lanka’s apex trade chamber - the Federation of Chambers of Commerce and Industry of Sri Lanka believes that the 2009 budget was marginal in the light of the Sri Lankan economy in the context of the global economy.

FCCISL President Kosala Wickremanayake said from the point of view of the Small and Medium scale industries the Chamber was espousing the cause of the increase in taxes for milk foods and other essentials to protec the domestic industries and agriculture was good from the point of the local farmers but stressed that inflation would rise further with the increased Cost of Living and essentials from the 20% unless the exchange rate was managed correspondingly and effectively.

CEO of Brandix Ashroff Omar commenting on behalf of the Joint Apparel Association Forum (JAAF) said the apparel industry welcomes the 2009 budget and it has focused on the apparel industry positively.

“This budget has reduced the cost of surcharge on electricity, which is a huge benefit for the apparel industry. We are happy for the Government initiative to reduce furnace oil prices which will immensely help the industry through this budget, he said.

The industry also pleased on the budget proposal to fund allocation to facility new market access and maintain current markets for the apparel industry. Despite the current economic conditions we could say that overall this is a positive budget”, he said.

Chairman of the Laugfs Group of Companies W.K.H. Wegapitiya said the 2009 budget has focused on strengthening local industries, which is a good move to the economic development of the country. This budget will boost local industries and encourage local entrepreneurs

This is an agri-based budget. It has provided many concessions including tax benefits for the agricultural sector and animal husbandry. Generally this is a local industry friendly budget, he said.

The Director Economics of the Government Peace Secretariat Rohantha Athukorala said the focused development plan for the North-East in the 2009 budget is commendable. “We can now tell the world that there are no underserved regions in Sri Lanka. Now its upto us to drive implementation. The increased investment in the estate sector in 2009 is a good move. Athukorala went on to say that Economic Development is the key pivot to Peace in Sri Lanka but we must understand that 2009 is going to be tough year due the global economic meltdown,” he said.

Past President - Federation of Chamber of Commerce and Industries Nawaz Rajabdeen said this is a balanced budget with more emphasis on the local agriculture sector.

He said under this budget the local agriculture sector and the SME sector will be developed to a maximum with more emphasis in this budget.

It has also given a lot of incentives for local producers which is a good move, he said.

Managing Director of Lankan Indian Oil Company (LIOC) K. Ramakrishnan speaking to Daily News said that they will reduce oil prices from tonight.

“We will reduce diesel by Rs. 30, kerosene oil by Rs. 20 and petrol by Rs. 15. However the IOC will lose Rs. 5 per litre by the reduction of diesel,” he said.

“This would be a benefit to the customer,” he added.

Past Chairperson of Women’s National Chamber of Commerce and Chairman/Managing Director of Ramya Apparels (pvt), Ramya Weerakoon said this was a good budget for the development of the country.

Plans to develop the agriculture sector is encouraging,” she said. “However I think that all the funds allocated for the Gamaneguma in the last budget was not utilised,” she said.

Chief Executive Officer of Lanka Orix Leasing (LOLC) Ravi Tissera said he was delighted about the excellent move to strengthen the agriculture and dairy farm development from the budget this time.

“LOLC has a role to play as we have started micro financing recently and promoting loans for the rural people to start agri businesses,” he said.