Bud­get 2018: Why and how is it dif­fer­ent?

Daily Mirror (Sri Lanka) - - BUSINESS NEWS - BY AMILA MUTHUKUTTI

The bud­get for the year 2018 that was pre­sented to par­lia­ment by Fi­nance Min­is­ter Man­gala Sa­ma­raweera was to­tally dif­fer­ent from the oth­ers that we saw dur­ing the past few years.

A bud­get that in­di­cates eco­nomic di­rec­tion in a coun­try has to be drafted as per eco­nom­ics but not pol­i­tics. How­ever, what could be seen here in Sri Lanka over the years has been that peo­ple were used to ex­pect­ing bud­getary re­liefs un­der what­ever eco­nomic sit­u­a­tion.

It was even be­fore the bud­get was pre­sented that the econ­o­mists warned of a po­lit­i­cally-mo­ti­vated bud­get giv­ing re­liefs, as an elec­tion was be­ing planned to be held next year. Nev­er­the­less, the bud­get doesn’t seem to have given the re­liefs that the peo­ple were seek­ing but pre­sent­ing eco­nom­i­cally vi­able sug­ges­tions that will hope­fully take the na­tion for­ward. Hence, this may not be a pop­u­lar bud­get among the pub­lic that are only fo­cused on price re­duc­tions.

The bud­get pro­pos­als ap­pear to have left many to be dis­cussed in an eco­nomic sense. Peo­ple should avoid dis­cussing on the bud­get in a po­lit­i­cal per­spec­tive be­cause it is likely to hide not only cer­tain strong points but also weak points from you, al­though it is some­thing hardly seen in the Sri Lankan con­text.

Blue-green econ­omy

It is ‘blue’ be­cause we plan to in­te­grate the full eco­nomic po­ten­tial of ocean-re­lated ac­tiv­i­ties in for­mu­lat­ing the over­all growth strat­egy.

It is ‘green’ be­cause we build our econ­omy on an en­vi­ron­men­tally sus­tain­able de­vel­op­ment strat­egy, stated Sa­ma­raweera start­ing his maiden bud­get speech that ex­plained the rel­e­vance of the blue-green econ­omy con­cept to Sri Lanka.

A crit­i­cism can­not be avoided that al­most ev­ery bud­get pre­sented thus far weighted the re­sources in the land more than the re­sources in the ocean. That’s why we still im­port canned fish from abroad.

As the de­vel­op­ment didn’t com­ply with the green con­cept, we had to face some tragic in­ci­dents like that in Meetho­ta­mulla. Con­se­quently, the econ­omy has to be green, so that sus­tain­able de­vel­op­ment can be achieved. Even if new laws were im­posed on those that dump garbage into rivers in the past, it was sug­gested to fi­nan­cially help them to buy new equip­ment to mit­i­gate the sit­u­a­tion. This new ap­proach is highly com­mend­able.

En­trepreneur­ship

Sri Lanka can be named as one of the coun­tries with a low­est rate of en­trepreneurs mainly due to two rea­sons: lack of cap­i­tal and knowl­edge. As a rem­edy to this, pri­or­ity has been given to cre­ate en­trepreneurs that cre­ate em­ploy­ments, iden­ti­fy­ing the small and medium enterprise (SME) sec­tor as the back­bone of the econ­omy.

It’s a chal­leng­ing task for en­trepreneurs to find col­lat­er­als re­quested by com­mer­cial banks for grant­ing loans. Fur­ther­more, start-ups are too risky in their first five years. Banks hes­i­tate to put their money at risky start-ups. How­ever, these are the iden­ti­fied im­ped­i­ments that kill en­tre­pre­neur­ial ideas with po­ten­tial to blos­som.

Un­der the Enterprise Sri Lanka credit scheme, those en­gaged in the SME sec­tor will be pro­vided with low in­ter­est rate loans. Hence, the bud­ding en­trepreneurs can put their busi­ness ideas into prac­tice.

When it comes to fe­male en­trepreneur­ship, the state of af­fairs goes from bad to worse be­cause women that ac­tu­ally sup­port for do­mes­tic en­ter­prises are marginal­ized from en­trepreneur­ship as usual. It has dragged the na­tion back since skil­ful labour is not blended with the pro­duc­tion.

Steps have been taken to en­cour­age fe­male en­trepreneurs in order that hid­den labour comes up to lead the busi­ness. The Enterprise Sri Lanka Credit Scheme will make avail­able credit fa­cil­i­ties with the in­ter­est sub­sidy be­ing at least 10 per­cent more for women en­trepreneurs rel­a­tive to oth­ers.

Ed­u­ca­tion

Ed­u­ca­tion is a very sen­si­tive area that can be considered an in­vest­ment in the long run. It was sug­gested to set up state med­i­cal fac­ul­ties at Wayamba, Sabaraga­muwa and Mo­ratuwa Uni­ver­si­ties to ex­pand med­i­cal ed­u­ca­tion, es­pe­cially at a time when med­i­cal ed­u­ca­tion is a hot topic among the pub­lic.

If there will be a sur­plus of med­i­cal doc­tors in the coun­try, they can be sent to for­eign coun­tries, as if In­dia does with its IT pro­fes­sion­als. This is of course bet­ter than send­ing house­maids to the Mid­dle East­ern coun­tries.

The mis­match be­tween the job mar­ket and univer­sity ed­u­ca­tion is iden­ti­fied as the root cause for the prob­lem of grad­u­ate un­em­ploy­ment that al­ways takes peo­ple to the street. Even though the in­tel­lec­tu­als raised the need for re­forms in the higher ed­u­ca­tion sec­tor, par­tic­u­larly in­tro­duc­tion of em­ploy­ment-ori­ented cour­ses at uni­ver­si­ties, noth­ing sig­nif­i­cant hap­pened.

It was sug­gested to ex­pand the tech­nol­ogy de­gree pro­grammes in sub­jects such as in­for­ma­tion and com­mu­ni­ca­tion tech­nol­ogy, en­gi­neer­ing tech­nol­ogy and bio sys­tems tech­nol­ogy, fur­ther adding seven new tech­nol­ogy fac­ul­ties to the univer­sity sys­tem.

Con­clu­sion

The bud­get speech is said to be the short­est in Sri Lankan his­tory, hav­ing valid points to be widely dis­cussed. Un­like the other bud­gets that re­duced prices on dhal, dry fish and sugar, this is ca­pa­ble of tak­ing the na­tion for­ward, if the pro­pos­als are put into ac­tions.

A bud­get im­ple­men­ta­tion unit has been es­tab­lished to mon­i­tor the im­ple­men­ta­tion process, the most im­por­tant part in a bud­get. This unit will be headed by Fi­nance and Mass Me­dia Min­istry Se­nior Ad­vi­sor Mano Tit­tawella and the min­istry’s Eco­nomic Ad­vi­sor De­shal de Mel.

It is up to the gov­ern­ment to prop­erly com­mu­ni­cate the long-term plans to the pub­lic, con­vinc­ing them to dif­fer­en­ti­ate an econ­omy-friendly bud­get from the other peo­ple-friendly bud­gets that fo­cused on the cheap things at the cost of the most ex­pen­sive and im­por­tant things in the econ­omy. (Amila Muthukutti is an econ­o­mist)

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