HIGHLIGHTS-Sri Lanka 2012 budget presentation

COLOMBO Mon Nov 21, 2011 6:30am EST

COLOMBO Nov 21 (Reuters) - Sri Lankan President Mahinda Rajapaksa on Monday presented the 2012 budget to the island nation's parliament.

Following are highlights of his speech:

RUPEE DEVALUATION

"We need to reduce the import cost and increase export revenue. When our currency has strengthened, our trading partners' currencies have depreciated. So I propose to devalue the currency by 3 percent with effect from today."

ECONOMIC GROWTH:

"We have been able to maintain the growth rate at 8 percent in 2011, the same as 2010."

The government initially had forecast growth of 8.5 percent in 2011, but trimmed the forecast to 8.3 percent last month.

"In the Northern region, it is reported that the growth is 23 percent, well beyond 8 percent." Last year, economic activity in the former war zone -- which was under the control of Tamil Tiger separatists for decades until the Sri Lankan military defeated them in 2009 -- grew at a 14.2 rate.

NO ELECTIONS IN 2012

"I will not give any elections next year.

The Northern Provincial Council is the only remaining provincial government that has not had elections.

Devolution of power to the provincial level in the Tamil-dominated north is a crucial demand of Tamil parties negotiating with the government over political concessions, with the backing of several Western governments.

TAXES

"In addition to rice, we need self-sufficiency in green grams, peanuts, ginger, and corn in order to achieve food security. So I propose a high cess on imports of these products."

"Vehicle registration charges will be revised while they will be increased for luxury vehicles in order to increase revenue of provincial councils." He also said tourism vehicle import duties will be cut by 50 percent

INFRASTRUCTURE

"We have allocated 30 billion rupees ($271.8 million)for the inter provincial road network."

"We can be the regional sports hub and that can help to strengthen our economy. I propose 500 million rupees for development of infrastructure complexes and all sport goods will be tax-free in order to encourage sports."

TOURISM VISA FEES

"We have decided to impose a vise fee of $10 per person from the SAARC (South Asian Association for Regional Cooperation) region countries and $20 from the other regions' visitors. There won't be any charge on children to encourage family tourism. Tourists who spend a minimum of 48 hours also won't be charged. This will give an additional revenue of 2 billion rupees."

DEFENCE SPENDING

Of 230 billion rupees allocated to defense, 203 billion or 88 percent will be spent on salaries, food and uniforms.

STATE SECTOR WAGE HIKE

"I propose a salary increase of a 10 percent to the state sector employees including for the military."

PLANTATIONS

"We have a very limited land extent... we will completely stop the selling of government lands for the private sector and have decided only to lease out on a long-term basis

"If any investor does not adhere to the lease agreement, action will be taken to cancel the those lease agreements

"Now we have identified 37,000 acres of land under the plantation industries which are not used. These identified lands will be handed over to identified families for a 30-year lease, 2 acres each to develop small estates with lending facilities and seeds."

($1 = 110.375 Sri Lanka Rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Bryson Hull)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.