LIVE UPDATE: 2021 Budget Speech
November 17, 2020 01:56 pm
- “I request all of you to give your blessing to the development budget aimed at economic revival and poverty reduction” - PM
- The expected economic growth rate for 2021 is 5.5 percent.
He emphasize that it is the govt’s medium term vision to reduce the budget gap through increasing the economic growth up to 6 percent and increasing the government revenue from its current level of 9.7 percent to 14.1 percent.
By 2025, the budget deficit is targeted to be 4 percent 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, he 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.”
- PM says this is a development budget presented to elevate an economy that has been shattered.
It covers all sectors under a macroeconomic vision aimed at fulfilling the “Vistas of Prosperity and Splendour,” he said.
- It is expected to provide concessions on required taxes and specific goods trade, banking and foreign exchange with the objective of converting the Port City Economic Zone as one of the hubs for investment promotions in the country.
- Prime Minister says steps are expeditiously underway to develop the Colombo Port City Special Economic Zone as an attractive business hub.
- Tourism, foreign and commercial activities of the first phase of the Colombo Port City is scheduled to be commenced in 2021.
- PM says he expects to present to the Parliament a new legal framework conducive to promote commercial services and investment in this Special Economic Zone in January after the Budget Debate.
- Rs 3,000 million allocated for waste management in Pradeshiya Sabhas in order to prevent the wildlife from being attracted to villages due dumping of garbage in village boundaries close to wildlife.
- It is planned to implement a credit certification scheme for development of small and medium scale enterprises in rural areas.
- Rs. 3,000 million allocated to establish elephant fencing and trenches, and also to construct tanks in the wildlife areas while meeting the requirement for food of the animals, protecting wildlife habitats.
Also to empower the communities to engage in community safeguard mechanisms, with a view to mitigate the loss of property and life that arises due to the human-elephant conflict.
- An additional allocation of Rs 3,000 million to develop rural school playgrounds and rural sports societies, encourage school children to engage in sports, improve regional sports activities, promote volleyball, and to implement development activities to encourage women’s participation in sports.
- In order to support the programme to upgrade household economies centered around 200,000 Samurdhi families and thereby empower their villages, Rs 10,000 million will be allocated.
- An allocation of Rs 3,000 million to provide the required teachers and basic facilities to the rural schools, along with the 1,000 National School Development Programme to be implemented at the Divisional Secretariat level.
- Rs 5,000 million allocated to improve rural hospitals, dispensaries, and maternal clinics.
- Proposal to allocate Rs 20,000 million additionally to construct 50,000 kilometers of rural roads under the 100,000 kilometer program, covering almost all villages.
- In line with the government’s target of providing safe drinking water for all in the next three years, an additional allocation of Rs.5,000 million will be made to provide pipe borne water connections to 450,000 houses in 2021.
- PM proposes to allocate additional financing amounting to Rs. 1,000 million as government contribution, provide credit facilities through Samurdhi banks and other state banks and to implement a special insurance scheme through the Sri Lanka Insurance Corporation.
- He also proposes to expand the Lanka Sathosa super market network to urban and semi-urban areas in collaboration with wholesale trade using warehouses of Sathosa and Food Commissioner’s Department.
- It is proposed to increase the forest coverage, by using the lands available on both sides of the roads, schools, government and private offices and urban environments coupled with the accelerated program of expanding the forest cover by 15,000 acres.
- Proposal to strengthen the surveillance by the Sri Lanka Air Force to prevent illegal deforestation.
- Identified deforested lands to be reforested with the assistance of the Sri Lanka Air Force.
- Rs 3,500 million proposed to be allocate for the accelerated forestation programme during 2021-2023.
- Proposal to allocate an additional amount of Rs 200 million for identified priority programmes such as the prevention of irregular disposal of sewage and regulation of sand mining.
- Proposal to allocate an additional amount of Rs 200 million for identified priority programmes such as the prevention of irregular disposal of sewage and regulation of sand mining.
- “Surakimu Ganga” national environment conservation programme to conserve the water resources in 103 natural river basins in the country used for irrigation, drinking, generation of power, industries, tourism and other needs.
- More than 30 percent of the population live in the proximity of river catchment areas, says PM.
- Single-use polythene and plastic, also knows as disposable plastics, to be banned from January 01, 2021.
This is “to ensure the management of polythene and plastic waste in an environmentally sensitive manner,” he said.
- PM: “It cannot be justified to have two different ages for compulsory retirement for men and women. The compulsory retirement age for the public sector is 60 years, whereas it is 50 years for the private sector. It is further lower for females. Contrary to this, life expectancy for females is 76.6 years and life expectancy for males is 72 years.”
“Therefore, based on the life expectancy, it is proposed to amend the Employees’ Provident Fund Act to expand the retirement age for both men and women up to 60 years.”
- Proposal to reduce the import taxes on vehicle spare parts and to exempt machinery used in construction industry from import taxes.
- Report of the presidential commission probing ETI malpractices and affiliated companies forwarded to AG for further legal action.
- Immediate steps to be taken to construct a 300 MW coal power plant and a 600 MW natural gas power plant.
- Development of Ratnapura International Gem Industrial City and the gem and jewellery industry as well as 3-year income tax holiday on gem export income.
- Central Expressway Kerawalapitiya-Meerigama section as well as Kurunegala-Dambulla sections and Pothuhera-Kandy sections expected to be completed by 2024.
- Ingiriya-Kahathuduwa section will be completed as the first phase of the Ruwanpura Expressway and added to the national expressway system.
- Daily wage of estate workers to be increased to Rs 1,000 from January 2021.
- PM says tourism industry can be developed into an industry exceeding USD 10 billion income, although it will take time.
- Taxes and charges levied by local government institutions on tourism businesses to be simplified and be subjected to a maximum limit.
- Repayment of Refinancing Loan facilities provided by Central Bank of Sri Lanka (CBSL) to tourism sector extended until September 30, 2021.
- Walking tracks and connected common facilities within municipal council and urban council areas.
- Artificial running tracks to be built in Kurunegala, Jaffna, Torrington, Bogambara and Diyagama sports grounds.
- A new Sports City in the Sooriyawewa area with IT and new technology facilities for international cricket.
- || Parliament adjourned for 30 minutes for a tea break ||
- Steps to ensure national security : PM
- Priority given to strengthen Sri Lanka Navy to control the drug menace and prevent the country from becoming a hub for international drug traffickers.
- The government expects that this investment will help control the smuggling of goods and provide security to fishing resources and fisheries communities as well as create a safe environment in the Indian Ocean for shipping activities.
- International commodity trading hubs centered around the Colombo and Hambanthota harbours. Tax concessions for offshore businesses and warehouse facilities to encourage investment in bonded warehouses facilities.
- 10 sports schools with artificial running tracks to be developed.
- Sports complexes to be built for the 2032 Olympics, increase women’s representation in international sports, to create a sports economy of USD 1,000 million by 2025.
- Agriculture, Livestock and Fisheries sectors to be exempted from income tax for the next 5 years.
- Facilities of state universities to be expanded. Funding allocated - PM
- PM says Sri Lanka spends U$D 550 million per year to import pharmaceutical drugs under Sri Lanka’s free healthcare system.
- Rs 1,500 million to be invested to increase production of “Thriposha” in the country and expand distribution to reach more pregnant mothers and infants.
- ‘Gurugedara’ educational television channel to be introduced to all students soon with Rs 3,000 million in additional provisions allocated for this.
- Government to establish five ‘Plug and Play’ technology parks in Galle, Kurunegala, Anuradhapura, Kandy and Batticaloa districts.
- Sri Lanka Police service to be strengthened to ensure public safety.
- Rs 2,500 million additional funding for various programmes for public safety.
- President has placed special emphasis for the digitalization of the state sector, says PM.
- Government’s vision is a technology based society - PM
- Plans to invest Rs 15,000 million to expand telecom services and achieve 100% coverage for 4G fiber broadband.
- Telecommunication towers to be built in state lands in a joint operation by the TRC and CEB with the help of local contractors.
- Tax concession to encourage local companies for stock market listing.
- 50% income tax exemption to local companies if they register before December 31, 2020 to be listed in the stock market.
- ‘Samurdhi Life Savings Accounts’ for Samurdhi beneficiaries.
- He proposed a relief system to pay National Building tax (NBT).
- A special tax appeals court is to be established.
- The PM also said that a special goods and services tax will be introduced.
- He also spoke about ‘policy based borrowings’ from foreign for development clusters.
- Prime Minister Mahinda Rajapaksa, delivering the budget speech, says that the government is expecting to achieve 6% economic growth.
Prime Minister Mahinda Rajapaksa commenced delivering the budget speech at the Parliament.
In his capacity as the Finance Minister, the PM presented the budget o the parliament at around 1.40 pm.
It is the 75th budget report of the country, the Department of Communication of Parliament said.
The Appropriation Bill will seek the allocation of Rs. 2,678 billion for the service expenditure and according to the Bill, limit on borrowings for the financial year 2021 has been set at Rs. 2,900 billion.
The second reading debate of the budget will be held from the 18th to the 21st of November, following the presentation of the budget speech by the Prime Minister.
The vote on the second reading will take place on November 21st at 5.00 pm. 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 the 23rd of November and is scheduled to conclude on 10th of December. Accordingly, the vote will be held at 5.00 pm on the 10th of December.
Secretary-General of Parliament Dhammika Dasanayake stated that necessary arrangements have been made to hold sittings of Parliament in accordance with all health guidelines and regulations during the entire period of the budget debate from today (17).
Only Ambassadors and officials authorized by the Ministry of Finance are invited today, and seats reserved in the Speaker’s Gallery during the budget presentation will be subjected to health and safety regulations. Meanwhile, the Public Gallery and the Media Gallery will remain closed.
Following the budget speech, traditional tea party hosted by the Minister of Finance will be held this year but it will be limited to Members of Parliament, Ministers, Ambassadors and invitees, the media release added.
Due to the prevailing COVID 19 situations, the parliamentarians will not be able to bring guests to Parliament during the budget debate, it read further.
