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Sunday, November 11, 2012 - 11.20 GMT

GOSL committed to fiscal consolidation – ADB


The Asian Development Bank said that it was pleased to see the Government was committed to fiscal consolidation despite difficulties from the economic slowdown.

ADB Country Director in Sri Lanka Rita O’ Sullivan told The Island yesterday that the budget targets were within the Medium Term Fiscal Framework, with the deficit estimated to fall to 5.7 per cent in 2013 from an estimated 6.2 per cent in 2012. "It is also noteworthy that within the context of the current global conditions, the 2012 budget targets are projected to be on course," she said.

"The 2013 Budget follows the overall direction of the Government strategy, as in previous years. Budget proposals address the bottlenecks in the economy to ensure further advances towards upper-middle income, focus on the critical sectors of renewable energy, urban development and water supply, and skills development, which are sectors that ADB supports under the Sri Lanka Country Partnership Strategy," she said

She also said that in particular, the ADB was encouraged to see that reconstruction in the North and East continued. "We also welcome the budgetary provisions to fast track the national reconciliation process. ADB notes that its partnership with the Government proposes also to modernizes water distribution system in Colombo to reduce the non-revenue water consumption," she said.

Meanwhile, ADB’s Senior Country Economist Tadateru Hayashi said: "The budget focuses on promoting value creation, improving research, technology and development, and has features focusing on the environment through improved forest cover and by supporting solutions such as renewable energy and organic fertilizer. All of which ADB sees as being positive for Sri Lanka’s development. Agriculture receives prominent focus in the budget speech, and it is noteworthy that features of value addition, mechanisation, and environmentally friendly approaches are identified and supported.

"With Sri Lanka reaching middle income status, it is also noteworthy that the budget contains measures to develop Small and Medium Enterprises, capital markets, and to introduce flexibility for foreign exchange transactions.

The budget indicates that 46 out of the 70 State-Owned Enterprises, that were under the purview of the Committee on Public Enterprises (COPE), have been transformed to profit making entities and we welcome these results.

"The Budget also focuses on continuing the tax simplification process, started through the 2011 reforms based on the recommendations of the Presidential Tax Commission. This displays the Government’s focus to stay within the targets of fiscal consolidation."





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Last modified: November 11, 2012.

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