Sri Lanka budget was announced by the President of the country. The agenda of the budget was varied but more stress was laid on certain areas. The article below gives an overview of the budget for the FY 2007.
Sri Lanka Budget for the FY 2007 laid emphasis on growth in the economy, agricultural development, social welfare and infrastructural development. It was ascertained that the President’s Sri Lanka budget lay a platform for rejuvenating the agricultural sector and upliftment of the rural population.
Economic Growth Despite Inflation:
While delivering the budget speech, it was also said that the country was taking the necessary measures to help the economy grow despite the fact that the rate of inflation was quite high. Facilitating growth in infrastructure was a prerequisite for the rapid economic development.
Growth in the economy was to take place in accordance with “Mahinda Chintanaya”. Providing employment opportunities for all and welfare of the people was also taken into account.
The SMEs or the Small and Medium Enterprises segment of the economy was given increased stress.
This is an agricultural development project for which Rs 2 billion was declared as part of the Sri Lanka budget for the FY 2007. It was decided that the financing of the project would be done for a period of three years.
The President also stated that every possible measure would be taken to decrease the budget deficit of the country. The budget also predicted that the budget deficit would decrease from 7.9% of GDP to 7.2% of gross domestic product. He went on to say that there were certain enterprises, which were not being able to perform as per standards. He declared that there would be a reduction of provisions enjoyed by them by as much as 5% and urged these enterprises to make use of their own assets for the revival of the firms as the Government would not be funding for their recuperation.
It was announced that the Government intended to raise as much as Rs 540.9 billion through taxes pertaining to revenues. Of this Rs368.2 billion would be procured from the GST or the Goods and Services Tax and from by collecting taxes, another Rs 72.2 billion was expected to be raised.
As part of the Sri Lanka budget 2007, concessions in VAT was made for the leather industry.
The households with low income were relieved by waiving as many as 5000 housing loans meant for them. These loans used to be procured from NHDA or National Housing Development Authority.
Port And Airport Development Levy was increase to 3% to hasten the development process of ports as well as airports.
The “terminal benefits” for outgoing employees(owing to retirement), was increased in the FY 2007 budget. The tax free limit was increased to Rs 5 million from Rs 2 million for employees retiring after a span of 20 years. In case of other categories, the limit was increased to Rs 2 million from Rs 1 million.
Government spending in the FY 2006 was Rs 700.3 billion.
In the FY2007, government spending was Rs834.8 billion.
The government earned as much as Rs 482.1 billion in FY2006 as revenue.
The government hoped to earn as much as Rs 599.8 billion for FY 2007 as revenue.