Despite the earlier claims that the 2015 budget wouldn’t be a “bag-full of election goodies,” the budget presented by President Mahinda Rajapaksa to the Parliament on Friday, in his capacity as the country’s Finance Minister, proved largely otherwise.
It is widely believed that Rajapaksa will hold a Presidential Election in January 2015, two years ahead of his second term finishes.
The proposed pension scheme for apparel sector workers, EPF hike for employees, 12 per cent guaranteed interest for bank deposits of pensioners, minimum monthly salary of Rs.15,000 for government servants, allowances for the widows of July strikers, reduction on water bills, more duty-free car permits, guranteed price for rice and the continuation of the fertilizer subsidy didn’t really sound “development oriented.”
However, despite giving away all these goodies, the Rajapaksa government expects to bring down the fiscal deficit to 4.6 per cent of the GDP from the current five per cent.
To its credit and largely thanks to the impending election, the budget 2015 contains some progressive measures, which could foster inclusive growth in the country, taking the post-war dividend to the people at the grassroots levels, as opposed to the rather exclusive growth model the country has been pushed into.
But, the giveaways—most targeting the impending Presidential Election—have robbed the allocations for the most important areas such as, education, health, research and development (R&D).
In its quest to become South Asia’s economic hub, the development of the country’s human capital is paramount. The government has only allocated a paltry Rs.500 million for R&D in the budget 2015, despite requests from various quarters to increase the portion. This clearly elucidates the shortsightedness and the short-term outlook of the Rajapaksa regime, which is more focused on maintaining power than taking important policy matters into concern.
On the other hand, the budget 2015 proposes to allocate Rs.1 billion to develop the necessary residential and research environments at the Post Graduate Institute for Pali and Buddhist Studies, to attract scholarly monks, historians and research students to work together with foreign students and researchers to be able to spread cultural and Buddhist values around the world.
The motive behind this budget allocation is undoubtedly noble, but a justification for that seems hard to come by, given Sri Lanka’s hub ambitions and compared with the chronic under-funding in areas such as lab testing, Nano-technology, agriculture, IT.
However, the proposed allocation of Rs.500 for research on kidney diseases and cancer is laudable given its timely importance.
A national budget is largely considered a policy document which spells out a government’s economic policies.
It may contain certain populist measures the government wants to implement but those should not overshadow the key economic policies the budget is based on. It is extremely difficult to figure out the key economic policies that have gone into the budget 2015, as there is a jumble of neo-liberal, protectionist and populist elements in it. Hence, the content in the budget 2015 is closer to pledges given during election times than to concrete policies that could place the country’s economy on a sustainable path.