Budget 2021 to offer economic prosperity to all - Cabraal | Daily News

Budget 2021 to offer economic prosperity to all - Cabraal

The Budget proposals for 2021 spelled out by Prime Minister and Minister of Finance Mahinda Rajapaksa were presented with long term development goals in mind to offer economic prosperity to all, rather than offering the traditional short term ‘goodies’ for a few, State Minister of Money and Capital Markets and State Enterprise Reforms, Ajith Nivard Cabraal said.

He was speaking at the KPMG hosted Budget Forum last morning. The State Minister said that with a battered economy due to mismanagement of the previous government and COVID-19 pandemic, a ‘high tax for the corporate sector’ was expected. “However we did not want to further burden the corporate sector and decided against this.”

He also said that instead, several incentives and moratoria were offered not only for the corporate sector but to SME, construction, tourism and different sectors of the economy as well.

The State Minister said that the government considered providing lasting solutions for the human elephant conflict, a better road network (target 100,000 development of roads) and drinking water for all as long term ‘goodies’ for all in lines with the President Gotabaya Rajapaksa’s Vistas of Prosperity. He said that the previous Mahinda Rajapaksa led government considered providing electricity for all as a priority and provided electricity for almost 99% of the households from 30% of households. Today pipe-borne water is accessible to only 42% of the population.

The government is also keen to promote ICT, shipping, local manufacturing of pharmaceuticals and also promote Colombo as a Financial Hub and several incentives were provided towards this. “We also target to get 500 new listings to the Stock market and several initiatives to this effect were spelled out.”

Extracting natural resources and putting them to best use through value addition too is another priority outlined by the government.

He said that the country’s economy is facing challenges not only due to Covid and other issues but also due to high debt repayment which was Rs. 38 trillion last year. Due to the depreciation of the rupee (Rs. 1.8 tn) and due to loans taken on high interest rates (Rs. 1.4 tn) by the previous government this debt increases by nearly 3.2 trillion each year. The government has now decided to restrict foreign borrowing and source 60% of them locally. He also disclosed that there are 289 going government initiated projects valued at over Rs. 5 trillion that are moving at a slow pace. “Priority would be given to accelerate them.”

He said the budget was also aimed at forgetting the negative economic impact due to the COVID-19 pandemic and also huge economic mismanagement of the previous government and rise again.