Budget 2014 reflects the government’s commitment to maintain macro fundamentals in an area which is conducive for people to do business, said Central Bank Governor Ajith Nivard Cabraal addressing a post budget seminar organized by KPMG.
“There is a certain commitment both from government and the Central Bank to maintain macro fundamentals at a healthy level and 2014 budget aims to shrink the budget deficit, spur growth and expand the debt market activities. Budget proposals that have been articulated by President Rajapaksa clearly shows where we want to reach and our policies are structured to take us there,” Governor said.
President Rajapaksa has made the enabling environment for the maritime industry and the banking industry with the provisions and incentives that he has offered.
“The Central Bank capital would be increased to Rs 50 billion which gives the impression to outsider, also that there is some stability as well as strength in the finance sector. When we reach the $ 100 billion economy in 2016, our financial sector most probably will double or may be grow even beyond that. To reach those levels, we need strong financial institutions, banks as well as finance companies,” Governor noted.
He also noted, “Provisions have been introduced to promote an element model for the consolidation of finance sector which is likely to take place next year.
The government has provided certain incentives to do that. So that we can make the finance sector strong. The banks will probably realize themselves that they can’t stay small and continue at the same level.
We will see a much healthier and stronger financial sector emerging to take us forward.
A strong financial sector is needed to develop the real sector in the economy and the financial sector is another building block in this whole plan and that also has been provided from budget 2014.