Sri Lanka budget 2012 focuses on socio-economic development

Nov 21, Colombo: Sri Lanka’s budget for next year will focus on the long-term socio-economic development of the country, especially in the areas of health, education and agriculture while reducing the poverty.

Sri Lanka President Mahinda Rajapaksa in his capacity as Finance and Planning Minister presented the next year’s budget today to the parliament. This is the 7th budget presented by the President.

In his speech, the President said the 2012 budget will reduce the deficit, estimated to be to US$ 4.2 billion, to 6.8 percent of GDP, from the 8 percent of GDP in 2010 due to the government’s economic policies and management.

Under the socio-economic development it will focus on uplifting the conditions of the people to alleviate poverty and increase the per capita income to US$ 4000 by 2016 from the current US$ 2,800.

President Rajapaksa stated that 2012 will record an economic growth of 8%. By maintaining this, the goal of reaching a per-capita income of US$ 4000 will be realized by 2016.

The budget has allocated 496 billion rupees for the social welfare and development process. With the implementation of projects such as “Divi Neguma”, inflation has decreased to 5%. The country is self-sufficient in rice production. The rate of unemployment has declined from 8% to 5%, while the population below the poverty line has declined from 15.6% to 8.9%.

The basic salary of government servants and those engaged in the security divisions will be increased by ten percent. The salaries of non-staff officials will receive this increase from January while the salaries of officials in the staff grade will be increased by five percent in January and a further five percent in July. The allowance for pensioners has also been increased.

The bill proposes to grant a monthly allowance of Rs. 750 to each of the parents of members of the security forces including the parents of those who were killed in action. The President also proposed allocating 1.7 billion rupees to the Ranaviru Authority for the welfare of the country’s security forces.

The President also proposed to devalue the rupee by 3 percent with effect from today to reduce the import cost and increase export revenue.

To promote self-sufficiency in agricultural commodities such as green grams, peanuts, ginger, and corn in order to achieve food security, the budget proposes a high cess on imports of these products.

A special fund with 50 million rupees will be set up to assist fulltime artists, journalists and writers who often face economic difficulties.

For defence, 230 billion rupees have been allocated in the budget. Out of this amount 203 billion rupees or 88 percent will be spent on salaries, food and uniforms for the security forces.

The proposed budget calls for total government expenditures of 1.595 trillion rupees (US$14.5 billion) and projected revenues of 1.126 trillion rupees (US$10.2 billion).

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