2015 Sri Lankan Budget bag-full of election goodies
With the Presidential election around the corner, Treasury officials headed by Dr. P.B.Jayasundera are fine-tuning the 2015 Budget on the directions of the President enabling him to unveil it in Parliament in two weeks.
Officials of the Department of National Budget and Department of Treasury Operations are under pressure in compiling final amendments to the draft Budget estimates, annexure and tables as well as making direct and indirect tax revisions to find money for election goodies.
The Treasury has to incur a sum of over Rs. 120 billion to increase the salary of public sector employees and the officials of National Budget Department were burning the midnight oil to meet the expenses for the salary hike and other concessions to be granted to the people in the 2015 budget.
The possibility of revising the salary of government servants numbering 1.3 million is also under consideration on recommendations made by the National Pay Commission appointed by the President in November 2013, informed sources said. According to Treasury estimates the total revenue receipts and grants amounts to Rs. 1,713 billion. The Appropriation Bill presented in Parliament last week estimates the total government expenditure for 2015 at Rs.1.812 trillion.
The President is expected to deliver his budget speech onTuesday, October 21st. But this date will be confirmed after his traditional consultation with astrologers and its finalisation at the party leaders meeting in parliament scheduled for Tuesday, October 7, high ranking government sources revealed.
The Government is focusing on the Medium Term Budgetary Framework 2015 – 2017 mainly to ensure development by creating more livelihood and employment opportunities, food security, energy security and environmental safety with particular emphasis on low income and poor families, these sources said.
The 2015 budget accords high priority to defence and urban development, education, drinking water in districts which are below the national average in social development, health, employment opportunities, basic infrastructure facilities and economic indices.
It has been planned to reduce the budget deficit to 4.4 per cent and increase the economic growth rate to 8.2 per cent during next year. In 2015, government investment is expected to be increased to 6.5 per cent of the GDP and maintain inflation at 5.5 per cent. As a percentage of the GDP the current government debt which is around 75 per cent is expected to be reduced to 71 percent.
Treasury officials made clear that government borrowings both locally and internationally including the raising of bonds overseas through state owned banks will be utilised for infrastructure development projects and improvement of the rural economy as well as to bridge the budget deficit and service foreign debt.
With the aim of winning the confidence of rural voters, the 2015 budget will make some populist announcements including a new crackdown on tax evasion with punitive fines, revision of corporate tax, streamlining the revenue collection process and provide concessions for farmers, fishermen, self-employed and small businesses.
With a drought affecting many farmers, the government will direct banks to suspend interest payments and delay loan recoveries under a special loan rescheduling scheme.
Under the initiative of protecting local producers and promoting import substitution, the commodity levy and cess on essential items, including maize, onions, potatoes and dairy products will be increased. Concessions will also be provided to improve the poultry industry encouraging exports.
| Proposed taxes
n15 per cent salary hike as an allowance subjected to a maximum of |