CCC says interim budget a positive step ahead

The Ceylon Chamber of Commerce (CCC) said the interim budget for 2022 presented on Tuesday is a positive step towards rebuilding the macroeconomic framework of the country.

The budget provides an estimate of the expected revenue and expenditure of the Government for 2022 within an environment of high inflation and can be built upon towards meeting the aspired targets in the medium-term fiscal consolidation programme, it said in a statement.

The Chamber notes that several proposals it has submitted in the past relating to State-Owned Enterprise (SOE) reforms, trade reforms and strengthening of the financial sector have been prioritised in the budget speech.

“We underscore the need for meaningful SOE reforms to be driven through the proposed SOE Restructuring Unit while also reestablishing the National Agency for Public Private Partnership, which could be a catalyst to attract FDI. The setting up of an independent National Debt Management Agency as announced, will also be vital in the management of public debt with greater transparency and governance. We also recognise that certain new areas of legislation will be looked at such as on bankruptcy while existing legislation like the Termination of Employment of Workmen Act will be reviewed. We look forward to play a meaningful role in these discussions towards such legislative reforms,” the CCC said.

It recognised the priority given to exports and trade by revitalizing the National Export Strategy, implementation of a Trade Adjustment Programme to facilitate the phasing out of para tariffs as well as broadening of existing trade agreements. The proposal related to the optimal use of railways for the transfer of agricultural products is also welcome and has been a key ask from the private sector for numerous years. The focus on providing more independence to the Central Bank through a new Act is also welcome. The proposal to facilitate the establishment of branch campuses of foreign universities through the BOI is seen as a step that can create more opportunities for local students while generating foreign exchange earnings by attracting foreign students.

“We request that there be greater accountability and transparency in the process of implementation and we look forward to supporting the policymakers where possible to streamline the implementation process in line with best practice. We also request Government to look at ways to reduce unjustifiable expenditure as much as possible and direct it towards meaningful social protection programs or assist in meeting fiscal and primary deficit targets. We hope that with the interim budget in place and implementation of the proposals outlined, it would be a catalyst towards reviving growth and eventually putting the country on an accelerated growth path,” it said.