Business

20th January 2002

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Let the "party" games begin!

A new government is installed, heads roll, and the game of musical chairs is on again. The past few weeks has seen a flurry of speculation about who will head what, with many an aspirant staking a claim. A deserving few, professionals to the core, have been given key positions in government boards and corporations, but many vacancies remain. Among the appointments already announced are (clockwise from top left) Arjuna Mahendran, as chairman and director general of the Board of Investment, Parakrama Dissanayake to head Sri Lanka Ports Authority, Chrisantha Perera as chairman Sri Lanka Insurance Corporation, Lal Nanayakkara as chairman People's Bank. Sunethra Ranasinghe gets the State Pharmaceuticals Corporation while Ken Balendra has been re-appointed Bank of Ceylon chairman.
Contents

Mind your Business 

Don't mess with Messiah
Earlier it were the political hangers on and party loyalists who were rewarded with the plums of office in the state sector.

But now that a decision has been taken to appoint people with a proven track record in the private sector to head key state institutions, there is a different kind of lobbying going on - corporate big wigs sending messages to ministers that they are "available" to be Messiahs of the state sector.

So much so that the Boss has asked that he be informed before any private sector players are given any top state posts.

Preying for Big Bird 
One deal that is being extensively reviewed by the powers that be these days is the management of the Bird of Paradise.

The desert boys are keen to bail out of the operation, we hear, but another bird is equally keen to take over their role.

But those who matter are once bitten twice shy and will keep the reins in their hands.

Face and cost saving
And then there was the big idea to keep the state retailer open twenty-four-hours-a-day.

That has been done now but the response of consumers has been lukewarm and even the staff are grumbling that they have to while away their hours doing virtually nothing.

Now, a face saving way of cancelling the operation is being looked at in earnest.


Simplified tax scheme in budget

* Reduce taxes as an incentive for growth * Budget to "rectify" economic sectors

* No removal of subsidies * Prima deal to be renegotiated

By Feizal Samath 
The United National Front (UNF) government wants to simplify Sri Lanka's tax structure and suitable amendments for this purpose are expected to be presented, possibly in the March budget, Finance Minister K.N. Choksy said.

Taxes, he noted in an interview with The Sunday Times Business, would be reduced to encourage industrial and commercial growth. "I find the tax system is in a sense, self-destructive. There is much scope towards simplifying the tax system by doing away with overlapping taxes."

The minister, who expects to present the new government's first budget in mid-March preceded by a vote on account in parliament, said the best tax system is one that applies the "lowest possible rate on the broadest tax base".

The customs tariffs system was also complicated and in this context a uniform and simple tariff structure is being worked out, Choksy said in one of his first newspaper interviews after the UNF won the December 5 polls.

Asked whether the controversial Goods and Services Tax (GST) and National Security Levy (NSL) would be discontinued, he said no decision has been made on this but some proposals are being looked at on the lines of what has been suggested by the IMF. He did not elaborate.

He said the government had obtained a US $ 60.6 million loan from the ADB to develop industries in rural areas while emphasising that the country would be settling down to an open market economy on the scale of the dramatic 1977 set of economic reforms.

But, he said, the subsidy on wheat flour would not be removed while the Prima Ltd deal would be renegotiated. "We are renegotiating the agreement with Prima so as to remove certain constraints on the liberalisation of the free import of wheat flour by the private sector," he said.

The minister said the government had decided to open out the petroleum sector with the private sector being allowed to import and distribute fuel. While there would not be any price control of petrol, a price structure would be worked out for diesel and kerosene as these impacted on the average consumer.

With a new procurement system being prepared by the Policy Planning Ministry there would be savings of defence spending while any extension of the ceasefire would bring in further savings to the government.

Choksy said he would be presenting a set of proposals to an IMF team visiting Colombo next month that will include renegotiating the suspended standby credit facility. The government also planned to negotiate a Poverty Reduction and Growth Facility (PRGF) with the IMF, continuing discussions on such a facility started by the former PA administration.

He said the Central Bank's Monetary Board would be expanded to include two private sector representatives. 



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