Budget 2001 curbs public sector spending
[09 Mar 2001]

Minister of Constitutional Affairs, Industrial Development and Deputy Minister of Finance, G L Peiris presented the Budget 2001 in parliament yesterday. 

The government suspended with immediate effect, all duty concessions on motor vehicles granted to all Members of Parliament, Provincial Councillors, Heads of Local Authorities, Public Servants and others.  This measure was brought into immediate effect due to the prevailing foreign exchange difficulties. 

The suspension will not affect those who are entitled to such facilities as a retirement benefit and for those who have already established Letters of Credit.  Government expects to save Rs. 500 million in foreign exchange by restricting the duty waiver for motor vehicles.

The national defence levy has increased from 6.5% to 7.5%.  This raise is expected to bring revenue of Rs 6.1 billion.  Strict measures have been imposed on government expenditure relating to staff, use of vehicles, telephones and travelling for Ministers.  In addition, the usage by public servants of fuel, electricity, water, telephone, travelling and other services will be restricted. 

Government also proposes to rationalise existing holidays by introducing appropriate amendments to the Holidays Act and the Shop and Office Act. 

This year's budget offered incentives to Sri Lankans employed abroad.  The incentives include housing loans at concessionary interest rates.  The package also included scholarships for the children's education and raised the expenditure for technical and University education and for primary education.  Migrant workers have been offered pension benefits commencing from the age of 55 years after successful completion of overseas employment.

Funds have been provided for Fishery Resources development to assist prawn farming, inland farming and other related activities. The fishery industry is an important foreign exchange earner for Sri Lanka.

The budget will increase the annual levy on betting centres from Rs 100,000 to Rs. 1 million and gambling centres from Rs 1 million to Rs. 25 million. The Betting and Gambling Levy Act will be amended to regulate such establishments and prevent proliferation of such centres countrywide.

A new health insurance scheme will be introduced to enable policyholders to receive treatment in any paid hospital.  Budget 2001 has provided 5-8 year tax holidays based on the location, in instances of relocation and expansion of industries at regional industrial estates.   

To facilitate the worker transport, import of passenger transport vehicles with 25 seats have been exempted from customs duty, in this year's budget, Following the success of the proposal in 1998.

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