Budget 2023 to lay new economic foundation

President Ranil Wickremesinghe in his capacity as the Minister of Finance, Economic Stabilization and National Policies, presented the Budget 2023 in Parliament yesterday. He said that it will pave the way for the creation of a new economy that will meet the needs of the 21st Century.

“A new economic foundation will be prepared to match the new trends of the world and the country is aiming at a economic growth of 7 to 8%.” The President said that the long-term development of the country (2023-2048) would be based on correct decisions and not popular decisions. The President said that proposals are forwarded towards a fiscal stabilization programme in bid to increase government revenue to around 15% of GDP by 2025 from the 8.3%of GDP achieved last year. “Government is targeting a primary surplus of more than 2% of GDP in 2025 and further improves it,” he said.

President Ranil Wickremesinghe delivering the Budget 2023 speech

Wickremesinghe said that the 2023 budget proposals have moved away from traditional budget speeches aimed at reducing the prices of goods, increasing wages and providing relief through the budget. Every government has done this and due to taking those popular decisions governments have failed.” The President said that the long-term development of the country (2023 – 2048) is based on the correct decisions and not popular decisions.

He however assured continuous focus on caring for the poor and vulnerable groups. The President said that in a bid to ensure a better future for the youth of Sri Lanka a new economy tailored to meet the expectations of the youth through a new approach that goes beyond traditional protests, struggles, and strikes should be created.

The President assures the commencement of a new journey ensuring the lifestyles that the society is familiar with will not fall to a lower level once again adding that economic reforms proposed by the IMF are only limited to stabilizing the economy. Meanwhile the chambers and business community responded to the budget positively saying that it has several long term positive sentiments that could take the country to the next level.

Shiam Marikkar

Secretary National Chamber of Exporters Shiam Marikar said they were very happy with the proposal that was spelled out by the President to make Sri Lanka an export oriented economy. “This is big boost for exporters and we will fully support this endeavor.” He also endorsed the merger of the EDB and BOI and said that both institutions can now work closely to promote exporters and woo FDI. Marikar said that the President proposed to establish 10 Agro-Entrepreneur villages in order to encourage export-oriented products with the use of modern technology and proposed to allocate Rs. 250 million for this purpose.

Founder of the Spice Council of Sri Lanka, Sarada De Silva welcomed the budget proposal to set up a

Sarada De Silva

separate department for the development and promotion of the Cinnamon industry in Karandeniya area. To this end, Rs.200 million has been allocated. “The Council has been lobbying for this for over two years. I think this should have been done 10 years back.

Nevertheless, we’re happy that our proposal has been accepted by President Wickremesinghe, and this is a good start,” De Silva stated.

Dhammika Fernando

Dhammika Fernando FTZMA Secretary said they were very pleased to note the proposal by the President to change labour laws. “Some of these labour laws we are practicing have been formulated in the early 1800 and they definitely need to change towards being more investor friendly. We also thank the President for the proposal in unifying labour laws and making a single labor law as currently there are separate labour laws for different sectors which are not practical and acceptable.”

Meanwhile, commenting on the abolition of the ICTA agency, Computer Society of Sri Lanka Secretary Damith Hettihewa said that it was set up for a period of five years and its mandate is over. Also there were some issues with its productivity especially during 2017 and 2018. He said a ICTA Agency is a must for a country like Sri Lanka to

Damith Hettihewa

move with modern technology and digitalization drive. The new Agency that would be set up should have professionals and have the ability to be self-sufficient in finances rather than depending on the Treasury like the ICTA. “The new body could help the government to create a new legislature and also develop and create tools and apps (similar to fuel passes) for both private and government sectors. This should be a very high priority Agency.

Dr. Sulochana Sigera

Chairperson of Women in Management Dr. Sulochana Sigera expressing her views on the budget proposal to introduce a loan scheme for women engaged in informal household business said targets of developing entrepreneurship skills of women cannot be realized, purely based on loans. She emphasized that investments should be made targeting women already engaged in businesses in order for them to take the existing business to the next level. I think this should come as a development loan. In addition, it is essential to introduce a loan scheme targeting informal sector unskilled women, especially those who return from overseas to start their own business.

The Institute of Supply & Materials Management (ISMM) requested the Government to consider seriously encouraging and facilitating export oriented medium level enterprises to enhance export-oriented business to earn Forex through exports.

Sarath Gamage

ISMM President Sarath Gamage said “Also, we requested Government to encourage entrepreneurs who are having capacity to start own businesses with their innovative, value adding products specially granting financial assistant through the banks which will support to stabilize the economy and enhance the export market while giving some sort of solutions for non-employees due to economic crisis. He said there were several positive proposals in budget 2023 to achieve the mentioned objectives.

Ariyaseela Wickramanayake

The proposed to establish 10 Agro-Entrepreneur villages in order to encourage export-oriented products with the use of modem technology and proposed to allocate Rs. 250 million for this purpose will help to ensure food security and self sufficiency in some agri-products, said President of Mawbima Lanka Foundation and Chairman Pelwatte Group, Ariyaseela Wickramanayake. He said that the investment should be made towards building storage areas and new technology should be introduced towards introducing new systems to reduce post harvest loss. “Government must also look at encouraging agro transport via rail as it will reduce consumption of diesel.”

Kelani Cables Director, CEO Mahinda Saranapala said some of the budget proposals were good and the President has taken a very positive approach.He said implementation as well as monitoring and reporting is vital with time lines and exporters need more incentives to penetrate into new markets.

Mahinda Saranapala

Managing Director Imperial Teas (Pvt) Ltd Jayantha Karunaratne said as a whole all the budget proposals are good which are looking for long term stable economic growth and having this centralized body for promotion of foreign trade and investment is very good and also trying to have economic zones also will be productive but to implement these proposals one need the private sector to work towards achieving these goals. Karunaratne said however that one big issue they faced was the high interest

Jayantha Karunarathna

rates but that has not been addressed which is blocking new investment and new work for the private sector and also the unnecessary restriction of import of machinery and materials needed for the export industry should be addressed and allowed to be imported without much restrictions.

Chairperson Phillips Hospital Kalutara and Senior Vice President Association of Private Hospitals and Nursing Indrani Fernando said that the plan to introduce paying wards to the government sector will also help the less affluent to seek better medical care.

She suggested that the government should come up with a comprehensive medical insurance system similar to England, EU, USA and other similar countries where anyone could have access to quality medical care.

Indrani Fernando

Commissioner General of Excise M.J. Gunasiri said that the proposal for a new laboratory for the Excise Department to test liquor will help to increase stranded of locally manufactured liquor. He said that Sri Lanka’s ‘beer’ brings in the highest export revenue around USD 22 million per year by exporting to 35 countries. “With this new laboratory we certify locally made liquor products to international standards which will enable the country to add more ‘made in Sri Lanka’ spirits to the export basked.”

M.J. Gunasiri

Meanwhile, an official from the National Agri Business Council said that they were pleased to note that the proposal to study the legalization of cannabis is only for the purpose of export.

The plantation of this is anyway happening in Sri Lanka illegally and making it legal will encourage even big private sector agro companies to get involved in it, thus creating a mega industry that will bring huge Forex to Sri Lanka in several million dollars.