A Budget for the future | Daily News

A Budget for the future

Prime Minister Mahinda Rajapaksa would have found himself in an unenviable position entrusted as Finance Minister to present the country’s 75th Budget (coincidentally on the eve of his 75th Birthday) in such an adverse economic climate where a deadly pandemic had taken a heavy toll of the epicentres of the economy.

That he emerged from the gloom and salvaged the situation says much for the resourcefulness and far sighted policies of President Gotabaya Rajapaksa in adjusting to emergencies in devising economic strategies to stand up to the worst challenge facing the country.

The Budget, contrary to gloomy predictions, spewed out no demons that would have pushed the public further against the wall. On the contrary, the public at large have been bestowed with benefits at a time the Government would have been excused for not indulging in such luxuries.

Beginning January next year, the Estate community will receive their long delayed Rs. 1,000 per day wage bonanza. In the face of the massive economic setback brought about by the collapse of all revenue generating sources in the wake of COVID-19, the Government had not skimped on funds for development work or expenditure on social welfare.

A sum of Rs. 3 billion has been earmarked to provide television/Internet facilities to rural schools to enable students to follow educational programmes. The Government will also continue with concessions to the Small and Medium Scale industries and the public servants announced during the initial outbreak of the virus. The maximum interest charged on Housing Loans to public servants granted by the banks will continue to fetch the low 7 percent interest rate. Both the public and private sector employees will receive the added bonanza of having their compulsory retirement age extended to 60 years (from the present 55 years).

Coming at a time when incomes have shrunk and take-home pays halved, this indeed will be a God-send to those on the fringe of retirement. This may also compliment the popular school of thought that the best productive years of an employee is when he/she reaches a mature age after the accumulated years of experience and skills.

The limiting of the personal income-tax threshold to Rs. 250,000 a month on earnings from employment, rent and interest etc. too is a salutary move indeed. The Budget claims to have abolished withholding-tax on all interest. The authorities should clarify whether this applies to interest of depositors in commercial banks who had seen their interest rates being slashed drastically.

We make this point since a sizable majority of these depositors are retirees solely dependent on their bank interest to survive - their medications and other needs in old age being of particular concern. Hopefully, the Budget debate would shed more light in this regard. The decision taken to get tough with legal action to be taken against the ETI owners if they continue to default their depositors is also a sound decision that would win for the Government the approbation of the thousands of depositors left in the lurch and would act as a strong deterrent against rogue finance companies in the future.

The Budgetary proposal to ferret out Black Money and channel this into the mainstream economy had been tried before under various Governments. How successful the move had been is not known. The extent of the Black Money now in circulation was recently exposed following the arrest of kingpins in the narcotics trade running into several billions of rupees and this was said to be only the tip of the iceberg. How the Government will rope in the offenders to part with their Black Money, whatever the incentives offered, short of prosecution is not known, particularly when drug trafficking offences carries the death penalty.

Budget 2021 also showcases the President’s vision for a technology-oriented workforce and a development outlook in all spheres. New universities are to be established in each district targeting specific areas of high demand for employment opportunities.

Earlier, higher education bursaries were confined only to university students. Now those undergoing vocational training too will be entitled to a grant of Rs. 4,000 per month which also goes to show the accent placed on technical education by the Government.

President Rajapaksa’s goal for self-sufficiency in food production and the gradual doing-away with imports is also reflected in Budget 2021 with a wide array concessions and subsidies granted to the farmers and Small and Medium Scale industries engaged in local goods production. Business organisations engaged in agriculture, fisheries, livestock and farming industries will be exempted from taxes for the next five years.

In furtherance to the accent laid on local production, a proposal was also made to requisition all uncultivated land in the country and put them to productive use.

No doubt the Coronavirus will continue to hang like a Sword of Damocles that will affect budgetary projections somewhat. Hence, the need for a collective effort to meet the challenges, so that the public may enjoy the benefits of Budget 2021.