Government stable despite criticism by Opposition

18 December, 2022

The budget proposals of the Government for 2023 were presented in Parliament by President Ranil Wickremesinghe as the Minister of Finance last month under a completely precarious economic environment in the country in comparison to all the past years since independence.

Presenting the budget proposals President Ranil Wickremesinghe very clearly and categorically stated that it is not a populist one like in the past but aimed at stabilising the economy to an extent from where we could provide relief measures in future.

The President said that the leaders must take the right decisions and not the popular decisions and deliberately and quite effectively ended populism that was practiced by almost all our previous finances ministers in the past with the consensus of their party leaders or the head of State.

Scrutinising the budget proposals one can safely conclude that President had endeavoured a conscious effort to act in the right direction, not abiding by the past usual practice of providing relief measures such as price reduction of essential items and Government servants salary hikes and enhancing Samurdhi beneficiary payments. Under this circumstances, as usual the main Opposition is clamouring that the 2023 budget proposals are not aimed at providing any relief to the people other than burdening them further with the introduction of new taxes and levies which may lead to a rise in the cost of living of every countrymen.

Other than the customary and habitual criticism by the Opposition the stand taken by many other economists, educationists and independent neutral scholars and analysts are said to be very productive and optimistic. It is the general belief that President Wickremesinghe with his ocean of knowledge in all matters with regard to the State administration has produced the best ever budget amidst this crisis situation in the country.

With the pathetic economic situation left behind by the previous administration, it became extremely a daunting task for the Government to present the 2023 budget which Ranil Wickremesinghe handled quite effectively and is supposed to be the best set of budgetary proposals submitted in the Parliament for the last number of decades according to independent economic analysts.

The main problem successive governments had been experiencing during the last number of years is the ever escalating and unbearable deficit gap between our national income and Expenditure.

The Government had realised very clearly that this system would lead the country to further catastrophic situation unless immediate remedial steps are taken.

New vision

President Wickremesinghe as the Finance Minister had focused his attention basically centered around export oriented economy, green economy and digital economy the three sectors which are indispensable for the economic growth of the country.

Our traditional exports such as tea, rubber and coconut related products and then the spices such as cinnamon, cloves, pepper, cardamons and fruits and vegetables and other export crops to be given the top priority with immediate effect.

Apparel export industry had been the biggest revenue earner for the national coffers for the a long period since its inception though its rapid growth had been stalled during the recent past for which the remedial measures had been taken by the 2023 budget to revitalise the apparel export growth and it’s expansion.

The green economy is another sector the 2023 budget had anticipated enumerated and forecast which had not been exploited or even explored by the previous governments mainly due to the lack of competency and knowhow of this segment.

Digital economy is yet another vast economic achievement if correctly and systematically applied in the country with the expertise advice of the professionals of the trade.

Digitial novelities include Digital Banking, e-commerce, virtual education, smart phones apps and collaboration platforms. This is a multi- billion dollar generating project and our neighboring countries such as India, Bangladesh, Vietnam, Malaysia and Singapore earn a substantial percentage of their national income by digital economy. We Sri Lankans had not paid any attention to this concept in our previous budgets mainly due to the lack of knowledge of same.

Consolidation of institutions

The 2023 budget has proposed to implement institutional reforms early. The new agency proposed in replacement of the (BOI) Board of Investment, (EDB) Export Development Board, (ECIC) Export Credit Insurance Corporation, and (NEDA) National Enterprise Development Board.

The new agency will cut down the implementation process of new projects and the potential investors’ valuable time will be saved. The prompt and efficient maneuvering of the new agency will help Sri Lanka to go up in the “Easy of Doing Business” Index at least by a few digits. Right now sadly we are positioned in the 105th slot in this all important index.

New economic zones

It had been observed during the past two years that due to a number of reasons investors keep away from Sri Lanka.

The country desperately needs foreign exchange to come out of this crisis and continue to grow further in order to achieve economic success.

The Government should immediately create business friendly regulatory frame works covering specific areas for new economic zones in proposed areas that will draw Foreign Direct Investments (FDI).

President Wickremesinghe as the Minister of Finance very clearly stated that his goal is to turn the entire country in to an investment hub.

Every year the Government anticipates minimum of three billion US$ in FDIs. However compared to the dismal figure of US $600 million in FDI attracted over the last year the task ahead would be a daunting challenge. The President is very optimistic that if the proposed changes could promptly enacted efficiently that we can expect a substantial growth in FDIs in the near future.

Free Trade Agreements

Another attractive feature in the 2023 budget proposals is to re-establish the Free Trade Agreements by which we develop international trade and earn desperately needed foreign exchange. Negotiating with the countries that already have FTAs and seeking new agreements also should be done urgently.

Re-structuring loss making institutions

The budgetary proposal to re-structure loss making state institutions is a timely move as they are busting enormous amount of public funds with no dividends whatsoever to the State coffers.

Some of these institutions are grossly over-staffed and treasury has to pay the salaries of the staff and building maintenance costs which amounts to millions and millions of rupees monthly.

Two new vital institutions.

The 2023 budget proposals have allocated funds to set up an international university of climatic change and a post graduate institute of medicine.

These two projects may initially involve a huge amount of funds but once it is off the grounds it may bring in desperately required foreign exchange for the country in addition to producing professionals in these sectors locally. Projects of this nature had not been even thought about by any of our previous finance ministers.

The 2023 budget proposals were discussed, debated, argued, criticised almost three weeks and finally approved by the members with a convincing majority.

President Wickremesinghe as the Minister of Finance was present in Parliament in most of the time and participated in the discussions and answered and clarified certain issues raised by the members instantly which had not been the practice of the immediate past finance ministers.

The general public opinion is that except for a very few negative points the 2023 budget proposals are largely acceptable and the foundation laid through the proposals has to be put into action forthwith sensibly to realise results.

Opposition parties anxiously awaiting an election early next year and have begun their political campaigns already criticising the 2023 budget proposals.

They miserably try to interpret the budget proposals as a directive of the International Monetary Fund (IMF). It is very pathetic to say that some of these critics have no knowledge whatsoever in economic or financial matters to make any productive contribution on the budget proposals.

The survey conducted at the Parliament had revealed that only less than 20 percent of the speakers directly contributed to the budget debate and all other members talked irrelevantly to the budget proposals slinging mud at each other on their personal issues and loss of properties during the May 9 incidents and the probable local elections early next year.

Some trade unionists of bankrupt political parties have got on to the streets with their usual political slogans against the budget proposals. It reminds the people the aged old proverb “Wagon moves steadily without heeding to the barking of dogs”.

– Sunday Observer Sri Lanka

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