Ceylon Chamber hails interim budget; says implementation is key

The Ceylon Chamber of Commerce (CCC) views the interim budget for 2022 delivered by President Ranil Wickremesinghe, in his capacity as the Finance Minister, as a positive step towards rebuilding the macroeconomic framework of the country. 

“The budget provides an estimate of the expected revenue and expenditure of the government for 2022 within an environment of high inflation and can be built upon towards meeting the aspired targets in the medium-term fiscal consolidation programme,” the CCC said in a statement.  

The CCC noted that several proposals it has submitted in the past relating to state-owned enterprise (SOE) reforms, trade reforms and strengthening of the financial sector have been prioritised in the budget speech. 

“We underscore the need for meaningful SOE reform to be driven through the proposed SOE Restructuring Unit while also re-establishing the National Agency for Public-Private Partnership, which could be a catalyst to attract FDI. 

The setting up of an independent National Debt Management Agency as announced will also be vital in the management of public debt with greater transparency and governance. We also recognise that certain new areas of legislation will be looked at, such as on bankruptcy, while the existing legislation like the Termination of Employment of Workmen Act will be reviewed. We look forward to playing a meaningful role in these discussions towards such legislative reforms,” the statement noted. 

“We recognise the priority given to exports and trade by revitalising the National Export Strategy, implementation of a Trade Adjustment Programme to facilitate the phasing out of para tariffs as well as broadening of the existing trade agreements. 

The proposal related to the optimal use of railways for the transfer of agricultural products is also welcome and has been a key ask from the private sector for numerous years,” it added. The chamber also welcomed the moves to provide more independence to the Central Bank through a new act and also the proposal to facilitate the establishment of branch campuses of foreign universities through the Board of Investment.

The CCC sought further clarity on the implementation of the revenue proposals, which were announced in May 2022, as they need to be legislated soon, if they are to become effective from October 1, as outlined in the interim budget. 

“While acknowledging the progressive proposals outlined in the budget speech, the key will be in terms of implementation, which successive governments have failed to carry out, thereby reducing the credibility of the fiscal framework and the effectiveness of budget proposals. 

We request that there be greater accountability and transparency in the process of implementation and we look forward to supporting the policymakers where possible to streamline the implementation process in line with best practice. We also request the government to look at ways to reduce unjustifiable expenditure as much as possible and direct it towards meaningful social protection programmes or assist in meeting fiscal and primary deficit targets,” the statement concluded.