A Budget for all!

• President Mahinda Rajapaksa presents development-oriented fiscal programme for 2012 and medium-term policy framework with support for almost all key segments of society and economy
• In their initial takes, overall welcome tone from private sector, though a few express concerns on select proposals

President and Finance Minister Mahinda Rajapaksa yesterday presented what the Government described as a development and people-oriented Budget for 2012, whilst a fair cross section of the private sector welcomed it, though some expressed concerns and the Opposition simply rejected it as it failed to address thorny issues.
True to Daily FT’s headline, the Government benches were elated that President Rajapaksa’s 7th Budget is lucky for Sri Lanka, whilst a host of sectors which the Daily FT speculated would be focused on or benefited became true.
The economic sectors and people directly being supported are too many to list and this reaffirms that Budget 2012 is all encompassing. However, predominant sectors and activities such as exports, agriculture, services, construction, tourism and aviation, apparel, transportation, industries, SMEs, healthcare, ICT, HR, education and training, research and development, infrastructure and sports economy are noteworthy. Page 2 features the initial reactions from private sector leaders from multiple sectors, who were available and willing to express their initial reactions. Most of the remarks were positive, whilst a few had reservations or emphasised that several proposals had zero effect.
The Ceylon Chamber of Commerce and other business chambers will make public their analysed observations today. A top corporate chairman described it as a sensible Budget, whilst another said it was balanced and safe, reinforcing continuity and providing greater clarity of the Government’s progressive policies as reported by the Daily FT.
UNP Deputy Leader Karu Jayasuriya said: “The Budget lacks direction and is neither here or there. For the consumer, it is inflationary; nor does it instil investor confidence. It has a political aim but lacks an economic aim.”

Party’s Chief Economist and MP Dr. Harsha de Silva claimed the Government had missed the bus and that the pay hike for public servants would be negated by devaluation and inflation. He also said that the Government was attempting to make it look like a nationalistic, domestic enterprise oriented, import substitution type of budget.
However, Dr. De Silva conceded there were some good things in terms of trying to incentivise entrepreneurs and local manufacturers, “which I think will have some positive impact”.
The JVP’s Vijitha Heratha alleged that Budget 2012 was a mere numbers gimmick and there wasn’t any tangible relief to the masses.
President Rajapaksa during his speech appeared very emphatic and at times jovial, cracking jokes as well as firing a few salvos at the Opposition benches, who were quick to create noise within just 20 minutes of the presentation, after which they walked out.
The President said that Budget 2012 had been inspired by inputs from all stakeholders who were consulted ahead. He said that the Budget deficit of Rs. 469 billion or 6.8% of GDP was virtually on account of development and welfare expenditure.
“I believe that it (Budget 2012) will contribute towards the long-term development of the country, while addressing many facets of poverty,” President Rajapaksa said.
His presentation also called for greater unity within the country as well as a stronger Opposition, which would support progressive policies in the national interest as the country was facing many challenges due to global crises.
“People have strong expectations to see a united Sri Lanka and to see the country becoming the emerging economy in Asia, as envisaged by the ‘Mahinda Chinthana – Vision for the Future,’” the President said, adding, “we should be committed to build a nation that all of us can be proud of, for the sake of our children and future generations as that is the sole aspiration of our people and nothing else.”

 

FT Quick Take

 

Budget 2012 perhaps covered everything under Sri Lanka’s sun. The following exhaustive list confirms that Budget 2012 was all-encompassing:

• Agriculture
• Banking and business development
• Caring society; welfare of the elderly; Child and women protection
• Coast conservation
• Coconut production
• Development of most difficult villages and religious places
• Development of the road network
• Development of traditional craft villages
• Development of urban, semi urban areas
• Drinking water
• Education/ Knowledge society
• Electricity for all
• Empowering artists and journalists
• Expenditure management
• Export development
• Fishery and livestock development
• Healthy society and healthcare
• Housing facilities
• Information technology
• Infrastructure facilities for Government agencies
• Investment incentives
• Irrigation
• Legal reforms and international arbitration centre
• New investment priorities
• Overseas economic cooperation
• Pharmaceutical manufacturing industry
• Prison reforms
• Promotion of arts and crafts
• Public enterprises
• Public service
• Railways and transportation services
• Research and technology
• Self sufficiency in food production
• Skills based foreign employment and education
• Small and MediumEnterprises (SMEs)
• Social integration
• Sports economy
• Support for low income families
• Tax administration and income
• Textile industry
• Tourism and aviation
• Wildlife conservation

Full coverage 1
Full coverage 2
Full coverage 3
Full coverage 4