Rajapaksa calls for positive outlook on government’s development drives
View(s):Presentation of Central Bank 2012 annual report
By Duruthu Edirimuni Chandrasekera
Sri Lankan President Mahinda Rajapaksa has called for positivism and optimism from his countrymen and to view government’s development drive encouragingly.
“There are many who snub the transformation happening before their very eyes. We have set off several infrastructure projects which will reap dividends to all Sri Lankans. We need to be more positive,” he told the audience delivering the keynote address at the launch of the Central Bank (CB) Annual Report for 2012.
President Mahinda Rajapaksa at the CB presentation. Pic by Hasitha Kulasekera
“The infrastructure that we invested in – new ports, airports and highways will add value to real estate, add value to areas, land and in general to the economy. With what we borrowed we increased our national wealth, thereby creating valuable assets. We are in a journey which would take the country forward, not backwards,” the president said. Commenting on an opposition member’s comment about three pilots needed to manoeuver a plane from Mattala Rajapaksa International Airport (MRIA), he said, “(they say) one pilot is needed to chase away the birds, the other to ward off the elephants and the third to pilot the plane,” drawing laughter from the audience when he added that these may be remarks that were being made out of jealousy towards the government.
The government after the war ended has spent a colossal Rs.214 billion to develop the North-East, he noted, adding that ex-LTTE cadres who have surrendered have been rehabilitated. “Some of them even serve in the Sri Lanka Army and the North-East which now contributes 10 per cent to the economy as a result of the Government’s development drive.”
Treasury Secretary Dr P.B. Jayasundera speaking at the event said that the Treasury is focusing on management of state enterprises better. He said this in reference to Ceylon Petroleum Corporation and Ceylon Electricity Board.
He added that this will assist interest rates to ease from May or June. Sri Lanka’s growth forecast for this year is 7.5 per cent against the 6.4 per cent of 2012, Central Bank Governor Nivard Cabraal told journalists on Tuesday at a press conference following the CB annual report 2012 presentation to President Rajapaksa.
This forecast is higher than IMF’s 6 per cent growth for Sri Lanka’s economy this year. Mr. Cabraal said that the annual average rate of inflation stood at 7.6 per cent last year and that inflation has stood within single digit levels in 2012 for the fourth consecutive year. Last year’s overall fiscal deficit was contained at 6.4 per cent of Gross Domestic Product (GDP) marginally above the targeted level of 6.2 per cent of GDP and significantly below the 6.9 per cent of GDP in 2011. The report said that raising the tax to GDP ratio by broadening the tax base and improving tax compliance would be critical to sustaining the fiscal consolidation process in the medium term.
“Although major tax reforms resulted in a simplification of the tax structure, revenue collection remained weak,” according to the report. It said that the industry sector contributed the most to last year’s GDP owing to the growth in the construction. The rupee depreciated against the US dollar by 10.43 per cent in 2012 while the gross official reserves increased to $6.9 billion by end 2012 from $6 billion in 2011. Debt service payments increased to Rs. 1,017.5 billion in 2012 compared to Rs. 895.4 billion in 2011 and Rs. 940 billion projected in the budget estimates, owing to an increase in domestic interest rates especially in the early part of 2012 and the depreciation of the Sri Lanka rupee against major foreign currencies, according to the report.
The report said that workers’ remittances increased to $5,985 million in 2012, up by 16.3 per cent from 2011.
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