COLOMBO: Sri Lanka’s Finance Minister Ravi Karunanayake said that all economic growth figures and data of the previous government was distorted and fabricated and this time the budget has been slashed of wasteful capital expenditure by the present government had reduced the 2015 Budget deficit from the Rs. 521 billion to Rs. 494 billion.
The 2015 budget was presented by former President Mahinda Rajapaksa in Parliament last November which had a Rs. 521 billion deficit, which was 4.6% of GDP, had been slashed to Rs. 494 billion, which was 4.4 percent of GDP, Minister Karunanayake said addressing a post mini budget seminar hosted by the Ceylon Chamber of Commerce at the Hilton Residencies here the other day.
He also said that the contingent liabilities which were government projects which were done on Treasury Guarantees by the previous UPFA administration, had risen from Rs. 6.9 trillion which was 72 percent of GDP which had risen to Rs. 8.8 trillion.
He also explained that the new interim budget was prepared in a record time of around 8-10 days. We won the elections on January 9 and took around another eight days to settle down while the remaining eight days were taken to prepare the interim budget.
He also invited the private sector to bring in their own proposals for the betterment of economic development. “We will invite and evaluate all proposals which will benefit all segments of the economy and we will not entertain crony capitalism, he said.
Minister Karunanayake also said that allocation of funds on defense was high in the post war era and at this juncture they will not take a risk of reducing funds but considering reducing the defense budget in the future once the Security Council gives an assurance in the future.
Deputy Minister Dr. Harsha de Silva, in an obvious broadside at the previous regime said, “What we mean by development is not mere ad hoc infrastructure development, but the general improvement of the lives of people, across the board.
This would mean the development of the lifestyles of the people not only among the middle class in Colombo, but also those of suburban towns and also the rural community in areas such as Tissamaharama which means that household incomes have to improve,” he said.
Dr. de Silva said the previous government boasted about 7.5 percent economic growth but household income increased by 0.5 percent, which did not help to develop the domestic lives of people in the country.
Central Bank Governor Arjuna Mahendran said on the need for the simplification of the tax regime, Sri Lanka has now 20 taxes and another 15 pages of tax exemptions. This is a real paradox where most of the taxes which were installed by the previous regime were on food items, which were extremely regressive, he said.
He also cited the example of Georgia which simplified its tax regime resulting in their revenue collections increasing from 10 percent to 25 percent within three years.
Retired Director General of Economic Affairs of the Commonwealth Secretariat Dr. Indrajit Coomaraswamy said that Sri Lanka had an aspirational society, but it was important to meet revenue targets.
