Ranil says reforms will ensure equitable growth

November 08, 2015 10:48 pm | Updated November 09, 2015 12:47 pm IST - COLOMBO:

Sri Lankan Prime Minister Ranil Wickremesinghe, who recently unveiled in Parliament a blueprint for what he called third-generation economic reforms, has assured his country that the proposed reforms will promote the “benefits of development among all” and “pave the way for sustainable development”.

Mr. Wickremesinghe, who also holds the portfolio of national policy and economic affairs, said the present government had planned to pay attention to five issues: generation of one million job opportunities, enhancing income levels of people, development of rural economy, ensuring land ownership to a cross-section of people, and creation of a “wide and strong” middle class.

Giving an account of the global economic scenario, Mr, Wickremesinghe said there would not be a “favourable” climate, given the reports of the United States Federal Reserve’s plan to increase interest rates and the Chinese economy going through a phase of uncertainty.

Alluding to the previous year’s provisional figure of budget deficit of six per cent of the GDP, he said the plan was to reduce it to 3.5 per cent by 2020 and this would be done through merging all sources of finance.

Land ownership would be offered to different categories of people. In respect of estates’ workers, which also covered persons of Indian origin who had been living in “line rooms” for over 10 years, the government would provide small pieces of land and houses. The Prime Minister’s observation followed the government’s move in April to assign land to each plantation family. It also renewed hopes for the take-off of a project of 4,000 homes, proposed to be built as part of a programme funded by the Indian government. The project had not seen much progress for want of land deeds in favour of beneficiaries.

On housing for the middle class, he said those who would come forward to fund it would be given state land and tax concessions. A loan scheme of low interest would be introduced for the middle class and the government staff.

On the lines of Temasek Company of Singapore, a State Holding Corporation, which would oversee all state-owned enterprises, would be established. Structural changes would be made in the Central Bank of Sri Lanka (CBSL) for enabling the Bank to work more independently. “The tasks of managing exchange processes and managing the ETF [Employees’ Trust Fund] will be taken out of their [CBSL’s] purview,” he said, announcing the amalgamation of the ETF and the Employees’ Provident Fund and the creation of a national pension fund.

Two thousand and five hundred rural development centres, each covering many villages, would be set up and they would have access to fully equipped rural economic market units. There would be large-scale agricultural enterprises to develop the rural economy and farmers could be members of such enterprises.

A policy of minimising regressive taxes would be followed. The tax management processes would be strengthened while removing tax holidays and benefits. The Prime Minister added that the government would encourage air connectivity, linking the northern and the eastern provinces (where Tamils live in large numbers) “efficiently with the rest of the country.”

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