The budget was to be presented last November but it was delayed due to the presidential and general elections held early this year.

According to the acting Finance Minister Dr. Sarath Amunugam, the budget will incorporate the Vote-on-Account and the expenditure made under the President's directives which covered the period up to June and major changes will only be in the 2011 budget to be presented in November 2010.

The Budget 2010 aims to reduce the fiscal deficit, introduce tax reforms, and provide incentives for investments while targeting a double digit growth in the future, the government said.

The government targets a budget deficit of 8% of GDP by next year and to reduce it further to 5% by 2012 while reducing the debt limit to 70 % of the GDP from the current 80%.

The government plans to resettle the remaining 25,000 displaced people by the end of the year and to provide livelihood facilities with other required infrastructure in the North. It also plans to cultivate 40,000 hectares of fallow paddy lands in the region as a measure to boost economic growth.

The budget proposes the development of infrastructure in the North including the reconstruction of A-9 and A-32 highways at a cost of USD 2 billion.

Capitalizing on the post-war peace in the country the government is seeking to promote tourism as a main source of income. The budget aims to increase the revenues from tourism to USD 2.8 billion by 2016 with 2.5 million tourist arrivals. It has targeted a five-fold increase in fold and tourist arrivals and nine-fold increase in the revenues.

In addition, the budget expects a USD 3 billion investment in the tourism development with Foreign Direct Investment and private and government sector investments. The government has identified seven tourism zones for the development.

The government expects to boost the economic growth to double digits from the 8% growth expected for 2011. Sri Lanka posted a 7.1% growth for the first quarter of 2010.

The budget also allows provisions to increase public sector salaries from 2011, create a pension fund, and strengthen the social security process.

The International Monetary Fund (IMF) which approved yesterday a USD 407.8 million, the third tranche of the USD 2.6 billion stand-by arrangement, said if carried out properly, the budget would significantly address past fiscal slippages, mainly through comprehensive tax reforms and sizeable cuts in recurrent spending and allow much needed reconstruction-related infrastructure investment.

Posted on 30 06 2010 - 07:00:45 by 001 print  |