Budget for next year presented under COVID siege
* Special Tax Appeals Court to resolve tax issues expeditiously
* Rs 500,000 start-up capital loan with 5-year grace period for entrepreneurs
* A sports economy worth USD 1,000 Mn from 2021-2024
* New city universities in each district
* Rs 8 Bn for technology enhancement
* Rs. 250 mn to develop temples in villages
* Extra Rs. 2 per dollar sent by Lankans employed overseas
* Two LNG plants, one coal plant to produce 1,000MW
* Sustainable and renewable energy supply by 2023
* Rs.15 billion for expanding mobile, fixed broadband
* An additional provision of Rs. 20,000 mn for the tri-forces
* Allocation of Rs 750 mn for activities of Rana Viru Seva Authority
* 5.5% economic growth rate for 2021 expected
* 4% budget deficit goal to be achieved by 2025
By Saman Indrajith
Prime Minister Mahinda Rajapaksa in his capacity as the Minister of Finance presented the 75th budget of the country, spelling out measures and proposals to achieve poverty alleviation and economic revival.
The budget proposals aimed to support the two year medium term programme of poverty alleviation and economic revival outlined for 2021-2023 in the “Vistas of Prosperity and Splendour’, the Prime Minister said.
“The expected economic growth rate for 2021 is 5.5 percent. I emphasise that it is our medium term vision to reduce the budget gap through increasing the economic growth up to 6% and increasing the government revenue from its current level of 9.7% to 14.1%. By 2025, the budget deficit is expected to be 4% of the GDP due to growth in tax revenue through the expansion of the economy and the trust placed on the management of public expenditure and public enterprises.”
Prime MinisterRajapaksa commenced delivering the budget speech around 1.44 pm. It continued till 4.54 pm including a half-an-hour tea break between 2.43 to 3.24.
Income tax exemptions have been proposed for agriculture, livestock, and fisheries sectors for five years. In addition, a 50% income tax exemption has been proposed for local companies if get listed in the Stock Market before December 31, 2021.
He proposed to establish a special Tax Appeals Court to facilitate the resolution of tax appeals without delays, Prime Minister Rajapaksa said.
“I propose to simplify the Taxes on Capital Gains, where such taxes will be calculated based on the sale price of a property or the assessed value of a property whichever is higher. I propose to exempt the tax on dividends of foreign companies for three years if such dividends are reinvested on expansion of their businesses or in the money or stock market or in Sri Lanka International sovereign bonds.”
The PM also noted that the government intended to bring necessary changes to the Inland Revenue Department (IRD) in order to increase the self-compliance of taxpayers and to strengthen tax audits as well as to increase tax revenues.
The Premier went to propose enforcing necessary legal provisions that enabled the cancellation of private tax consulting services that aid and abet issuance of forged tax reports.
A loan of Rs 500,000 as start-up capital with a grace period of five years would be introduced for entrepreneurs. A commitment fee of 0.25 per cent proposed to be levied from loan applicants to ensure that the funds are managed and utilized accordingly.
Prime Minister Rajapaksa proposed to allocate additional funds of Rs. 3,000 million to initiate a scholarship programme to provide Rs. 4,000 monthly allowance each to students receiving vocational education based on their active participation.
Technical colleges of which the annual intake is presently at 100,000 would be increased to 200,000 students per year, he said. A five-year-grace period for tax levied from Vocational Training Centres, which were able to double their annual intake of students, was proposed. Rs. 10,000 million would be allocated from the budget next year for new technical colleges to be established in Colombo, Kalutara, Kandy, Anuradhapura and Batticaloa. New city universities would be established in each district to cater to students pursuing popular subjects.
The PM proposed to create a sports economy worth USD 1,000 million during the period 2021-2024. For that purpose Rs 1000 million was proposed to be allocated from the budget. He proposed measures to increase female participation in national sports.
It was proposed to increase production of milk to meet local demand and a Rs. 500,000 loan will be provided for purchasing cows and meeting other dairy farm requirements. The Premier said that $300 million in foreign exchange was annually needed for milk imports and proposed to reduce that by $55 million by encouraging local milk production.
Prime Minister Rajapaksa proposed to allocate Rs. 750 million for the welfare of disabled armed forces personnel.
He proposed to allocate additional funds of Rs. 250 million to develop basic infrastructure of temples in rural areas.
The Budget proposes to allocate Rs. 8 billion for technology enhancement next year. In addition, allocation of Rs.15 billion for expanding mobile, fixed broadband under the “Gamata Saniwedanaya’ scheme was proposed. State land would be given to the Telecommunications Regulatory Commission for the proposal, the PM said.
The Prime Minister said that low-income women migrated for work and their remittances had strengthened the national economy. In a bid to increase annual remittances from migrant workers to over US$ 7 billion, he proposed to pay extra two rupees for every dollar sent by Lankans employed overseas. That was in addition to prevailing exchange rates; he said, assuring to implement a contributory pension scheme for Lankan foreign employees.
It was proposed to expedite the construction of the national expressway network and extend the Marine Drive to Moratuwa. Prime Minister Rajapaksa said a three-year programme to develop road infrastructure in the 25 districts would be introduced. Rs 1,300 million proposed to be allocated to improve the railway network including the extending of Colombo and Kelani Valley track.
Electricity consumers were assured of a sustainable and renewable energy supply by 2023.
The PM said that 70 per cent of the country’s energy supply would be obtained from renewable energy sources by 2023. The Lakvijaya and Kerawalapitiya Power Plants would be strengthened to guarantee interruption-free power supply through years 2021-2022. One coal-fired power plant of 300 MW and two LNG plants would set up. The Kerawalapitiya plant would be transformed into an LNG plant, the PM said, proposing to provide solar panels of 5 kilo watts each to 100,000 houses of low income families under an Asian Development Bank and Indian loan scheme. Loan of 4% interest rate would be provided to low income families for this purpose, he said.
Reforms were proposed for the Foreign Service and under the new reforms bilateral agreements would be reviewed to ensure national security and Sri Lanka’s non-aligned stance, the Prime Minister said, adding that under those reforms a new mechanism would be introduced to assess the efficiency and effectiveness of diplomats and foreign service officers.
“With the aim of ensuring national security, a medium term plan to enhance the professional skills of the heroes of our tri-forces, providing them with modern technological facilities is currently being prepared. In the context of resource constraints and identified priorities in the country, further strengthening of the Sri Lanka Navy has been given priority. We must combat the drug menace and must eliminate it to prevent our country becoming a hub for international illicit drug trade. The government expects to ensure that the investments will facilitate to control smuggling of goods, providing the required protection for the fishery resources and fishery communities and establishing a safe environment for carrying out tasks in the Indian Ocean.”
The PM proposed to allocate Rs. 20,000 million as an additional provision for the tri-forces to fulfill the basic requirements identified in the medium-term and long-term planning frameworks in accordance with their basic requirements.
He also proposed to allocate Rs.750 million for the activities implemented by the RanaViru Seva Authority, including the provision of medical aid, support for development enterprises, conducting of educational and vocational development programmes, housing loans and provision of supporting equipment for the disabled war heroes targeting, the retired and disabled war heroes of the tri forces, police and the civil defense force and the dependents of the families of those heroes have laid down their lives.
The Premier proposed an additional allocation of Rs. 2,500 million, to address special programmes aimed at strengthening public security. “The government has given special attention to strengthening the police so as to assure public security. We must consolidate the environment for all citizens to live freely without any fear. Resources will be allocated to support the control of the drug menace, to regulate vehicles and traffic rules, strengthening Tourist police, special training and provide the necessary facilities to prevent crimes and robberies. It is also proposed to expand the police patrols to ensure public safety by deploying special police vehicles.”
Prime Minister Rajapaksa proposed the implementation of a special loan scheme for public servants to obtain solar powered electricity. “When appointing or transferring public servants, it is proposed to ensure that such postings are made giving preference to the districts of residence. Permission will be granted for non-executive office employees of the public service to engage in other jobs or employment after office hours and those who seek foreign employment will be granted leave for two years. I propose to reduce the maximum interest charged on housing and property loans of public servants granted by banks under housing loans and advances up to a maximum of 7 per cent.”
The PM said: “The estimated Government Revenue for 2021 is Rs. 1,961 billion. The total Government expenditure is Rs. 3,525 billion and as such the difference between the revenue and the expenditure is Rs. 1,564 billion. It is planned to maintain the budget gap at 9 percent of the GDP since the private investments which amounted to 32.3 percent of the GDP in 2014 has decreased up to 27.6 percent in 2019 and since it is required to provide a robust start by the government to revive the economic growth which had stagnated recently.”
The second reading debate of the budget is scheduled to commence today (18) and continue till Nov 21. The vote on the second reading will take place at 5 pm on Nov 21. Parliament sittings will be held from the 18th to the 20th from 9.30 am to 5.30 pm. The debate of the Committee Stage will commence on Nov 23 and is scheduled to conclude on Dec 10. The final vote on the budget is scheduled to be taken at 5.00 pm on Dec 10.
PSC action could cripple health services, warns GMOA Secretary
There were vacancies for 89 specialist doctors in government teaching hospitals due to certain actions taken by the Public Service Commission (PSC), the Government Medical Officers Association (GMOA) said yesterday.
GMOA secretary Dr. Senal Fernando yesterday told The Island those vacancies had the potential to cripple the state health service, as the service was stressed due to COVID-19.
Dr. Fernando said: “Specialist doctors are appointed and transfered according to procedures established by the Health Service Minute. The Ministry of Health is responsible for the transfers and the PSC should oversee the transfering process to ensure that they are made in a proper manner.”
“The PSC has ordered the appointment of a committee to look into the matter but there is no mention of such a committee in the Health Service Minute. Instead of following the process, the PSC has tried to intervene in the process and 89 posts remain vacant during the time of COVID-19,” he said.
Hizbullah denies links with Zahran
But signed agreement for Zahran’s help in 2015 GE
By Rathindra Kuruwita
Former Governor of the Eastern Province, M. L. A. M. Hizbullah on Monday night told the Presidential Commission of Inquiry (PCoI) probing Easter Sunday attacks, that he had not had any links to National Thowheed Jamaat (NTJ) leader Zahran Hashim. The NTJ members had assaulted his supporters at Kattankudy in March 2017, he said.
Hizbullah said so when the Commissioners asked him about his links with Zahran.
Hizbullah was also asked about billions of rupees he had received from foreign organisations since 2016. Earlier in the day, it was revealed that close to Rs. 4 billion had been deposited by foreign individuals and institutions in two accounts Hizbullah operated at the Bank of Ceylon Colpetty Branch from 2016 to 2019.
The witness said the Sri Lanka Hira Foundation, a social service institution run by him, had received money from foreign countries after March 2016.
“Ali Abdullah al-Juffali of Saudi Arabia gave Rs. 308 million and Siddique and Diana Osmond of London gave Rs. 5.5 million,” he said.
Hizbullah added that he knew al-Juffali and some other Saudi philanthropists. Al Juffali family was one of the richest Saudis with an estimated worth USD 19.8 billion, he said.
Then, a video of a discussion Zahran had with Sibli Farooq of the Sri Lanka Muslim Congress was played at the PCoI.
The video showed Zahran and Farooq talking about a sum of one million riyals that Hizbullah had allegedly received from Saudi Arabia. In the video, Zahran says that he had no problem with Hizbullah receiving money from Saudi Arabia.
In response, Hizbullah said that by the 2015 Presidential election, Farooq and Zahran had been against him. A member of the Commission then asked why Hizbullah had entered into an agreement with Zahran during an election if he had acted against him.
Hizbullah said Zahran had told, on social media, that he would support politicians who agreed to some of his proposals.” All the parties joined him. I also went along,” he said. Earlier, it was revealed that representatives for the Sri Lanka Muslim Congress (SLMC,) Democratic Party, UNP, UPFA and National Front for Good Governance (NFGG) had signed agreements with Zahran in exchange for the support of NTJ in 2015.
Hizbullah was also questioned on the Aliyar clash between NTJ and Sunnath Wal Jamaat, a group that supported Hizbullah, on 10 March, 2017.
“Did you ask Zahran to surrender to the court through his mother?” a member of the Commission questioned.
“I made no such comment. I do not know if anyone in my party did so,” he said.
The Commissioners also asked Hizbullah about growing date palms in the Kattankudy area and placing Arabic billboards.
The witness replied that he had grown date palms because of the high temperatures in the area. Nameplates with Arabic letters had been put up to attract Arabic students as they were largely visiting the area, he said.
CA annuls summons issued on President
The Court of Appeal yesterday annulled the summons issued on President Gotabaya Rajapaksa over the disappearance of two persons in Jaffna in 2011.
Lalith Kumar Weeraraj and Kugan Muruganathan went missing in 2011. Last year, Jaffna Magistrate’s Court issued summons on Rajapaksa over a habeas corpus petition filed by the relatives of the two missing activists. They had named Rajapaksa one of the respondents since he was the Defence Secretary at the time of the disappearances.
Earlier, Rajapaksa had submitted a writ application stating that he found it difficult to appear before the Jaffna Magistrate’s Court due to security reasons. The Court of Appeal issued an injunction preventing Rajapaksa being summoned by the Magistrate.
President of the Court of Appeal A. H. M. D. Nawaz, declaring their decision, said that a Magistrate’s Court could only issue summons over a specific reason. However the Jaffna Magistrate’s Court had issued the summons based on a motion of a lawyer and that there was no legal basis for the summons. Thus, the Court of Appeal issued a writ notification declaring the summons issued by the Jaffna Magistrate’s Court void.
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