The Budget 2016 presented by Finance Minister Ravi Karunanayake took the form of a road map for economic reforms coupled with concessions for certain sectors.
In a marathon Budget speech lasting for more than four hours, he provided a few bonanzas to the public sector while proposing a Rs.2,500 salary increase to private sector employees, who were not paid the salary increase proposed in the previous Budget.
The price of a 12.5 kg domestic gas cylinder was reduced by Rs.150 while the price of a litre of Kerosene was reduced by Rs.10. However, the fee for vehicle emission tests had been increased to Rs.5,000.
Among the other concessions announced yesterday was the restriction of the fertilizer subsidy to small and medium scale farmers with a stable price of Rs.50 for a kilo of Keeri Samba, Rs.41 for a kilo of Samba and Rs.38 for a kilo of Nadu rice.
The minister said the economic woes of the country were overwhelming.
“A major effort had gone into finalising the Budget proposals and we seek to provide a solution to these woes through this budget,” he said. The budget deficit for 2016 has been estimated at Rs.740 billion or 5.9 per cent of the GDP when compared with the 6 per cent in 2014.
He blamed the previous regime for this unfortunate situation.
“We need to take positive action to introduce innovative methods and deliver results which are acceptable not only from an economic view point but also from a socio-political aspect,” the minister said while stressing the need for reforms.
The major reforms that the minister came up with was the restructuring of Lak Sathosa and using it to control the cost of living; the restructuring of Srilankan airlines; converting the Mattala Airport into a private public entity and using it for pilot training, logistic aero warehouse activities and cargo services and confining Mihin Lanka to the domestic airline industry. He proposed the building of domestic airports in Digana, Badulla and Puttalam.
The minister also made provisions to increase the number of police stations to 600.
Setting up of new authorities such as the Micro and SME authority and people’s trust was also proposed. In addition the much anticipated abolition of the super gain tax was announced while several other taxes such as tax levied on leasing of land to foreigners and a 50 per cent tax reduction for a five-year period was announced for those who invest in lagging sectors. Special privileges were announced for those who pay Rs.25 million a year as taxes. The Tax collected for collateral when paying back a loan was also removed.
Some of the other concessions included the reduction on the price of infant milk food by Rs.100 and a reduction in the price of potatoes and big onions.
Fixed prices for dried fish and a fixed price for chic-peas were among the other concessions which may bring some relief to the ordinary citizens. Stamp duty on credit cards was also reduced.(Yohan Perera and Ajith Siriwardane)
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