Budget 2001: What reliefs will it bring?
[08 Mar 2001]  

The first budget of the new PA Government will be presented in Parliament today.

This budget has drawn the keen attention of the working class, business community, and opposition political parties than at any time before. Most expectations are for relief from the rising cost of living.

The government recently introduced a floating exchange rate and imposed a surcharge on non-essential imports. These decisions of the Government were subject to intense dialogue.

Defence expenditure is expected to increase further from last year's Rs. 83 billion. The country is keenly awaiting the measures that would be adopted to bridge the deficit according to the appropriation bill introduced in Parliament last January. The anticipated expenditure of the Government is Rs. 365 billion, while the revenue is Rs. 118 billion, leaving a deficit of Rs. 247 billion, which is 9% of the GDP.

In order to bridge this deficit, Government may be compelled to increase taxes, curtail Government expenditure and obtain loans from foreign sources.

The consumer is already under pressure from increased prices of goods and services as a result of the floating exchange rate of the rupee and the surcharge on imports in addition to the 25% surcharge on the electricity bill.

There was speculation in business circles that the anticipated export growth targets would be impeded by imposing taxes on business.

Entrepreneurs expect that the government would provide benefits to them through the upcoming budget as the public expects more relieves.

It is expected that this budget will help to overcome these short-term obstacles while providing long-term economic benefits to the nation.

Sri Lanka's President and Finance Minister, Chandrika Bandaranaike Kumaratunga is expected to unravel the new fiscal measures in Parliament today.

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