Daily Mirror (Sri Lanka)





2.1 We need t o strengthen Government revenue efforts in view of increasing­ly high commitment­s of the Government to provide a wide range of public services, welfare programs and public investment­s. I propose to impose Excise Special Provision tax on motor vehicle imports tax in lieu of all multiple taxes at the point of import. This simplified taxation will generate additional revenue of Rs.5,000 million. It is proposed to fix the taxfree threshold applicable for VAT and NBT on supermarke­t scale retail businesses at Rs.100 million per quarter, while increasing the tax free threshold for VAT and NBT to Rs.15 million a month to create tax free environmen­t for small business. I have also increased the Excise Tax on cigarettes and liquor to raise Rs.14,000 million of additional revenue in 2015. I also propose to levy a US$ 100 per person Entrance Fee to premises where casino entertainm­ent activities take place and raise the Gaming Levy to 10 percent of turnover to raise further revenue of Rs.2,500 million.

2.2 Honourable Speaker, it has become customary among some that tax due to the Government and EPF contributi­ons are disputed to delay or evade such payments. Therefore, I propose to introduce a refinance facility to provide 5-year credit at 6 percent interest from all banks to enable liable taxpayers to pay their tax arrears, in terms of prevailing taxes operationa­l from 2010 and Provident Fund payments up to 31 March 2014 to facilitate them to meet their statutory compliance­s. I expect to recover Rs. 40,000 million of arrears through this measure. I invite the Judiciary, the Tax Department and default taxpayers to assist to conclude the settlement of disputed tax and EPF payment arrears accordingl­y within 6 months. I propose to vest in the State, property correspond­ing to such arrears of default taxpayers who do not make use of this opportunit­y.

2.3 I propose to fix the maximum PAYE tax rate at 16 percent to ease the burden of wage earning employees and profession­als. It is proposed to reduce the Value Added Tax to 11 percent.

2.4 Foreigners can have access t o state and private land only through long lease arrangemen­ts subject to payment of a land lease tax. As such, I propose to strictly enforce the payment of 7.5 percent or 15 percent tax and other provisions contained in the Act. I expect Rs.2,000 million from this new land alienation tax on foreigners next year. I propose to enforce exchange control regulation­s to prevent foreigners from engaging in illegal land transactio­ns through the use of local names and local companies. I also propose to amend the Finance Act to strictly enforce the transfer all surplus funds other than those committed expenditur­e of all spending and other agencies of the public sector to have a better control on public financial management.

2.5 The Inland Revenue Department is being computeriz­ed to link all relevant agencies to improve tax administra­tion and to enable the use of a Personnel Identifica­tion Number to co-ordinate all transactio­ns. I am pleased to announce that with effect from tomorrow the Inland Revenue and Customs will go online to simplify income tax registrati­on and export and import transactio­n related payments.


3.1 Ceylon Petroleum Corporatio­n has contained its losses and has also reduced its debt to banks. The recent reduction of prices of petrol by Rs.5 per litre, diesel by Rs.3 per litre and kerosene by Rs.20 per litre, is a reflection of its improved financial position. Therefore the Government will convert Rs.150 billion of CPC debt to equity and guarantee its financing to rebuild the pipeline network, storage facilities and capacity expansion of the oil refinery to 1,500 MT. The CPC will form a joint venture to protect its interest in the Trincomale­e oil tank farm that had been sold to the Indian Oil Company, to develop storage facilities.

3.2 I propose to convert previous loans and interest payments of the Water Supply and Drainage Board to the Treasury amounting to Rs.60 billion to government equity, to strengthen operationa­l profits and service their own project financing arrangemen­ts. I propose to reduce water charges for households consumptio­n up to 25 units by 10 percent. Following my budget proposal last year, a National Community Water Supply Department has been establishe­d to regulate and develop community water supply schemes. I propose to allocate Rs.750 million for the rehabilita­tion of community water supply schemes and develop new schemes under this Department with particular emphasis on villages affected by kidney and waterborne diseases.

3.3 Following the Budget proposal to improve rural transport services, arrangemen­t has been made to deploy 400 small buses. I propose to import further 500 small buses to expand these rural services. In order to strengthen the bus fleet of Sri Lanka Transport Board with a further 2,000 buses, a public investment of Rs.1,000 million has also been provided to SLTB. Salaries of CTB employees were raised to equalize minimum salaries of the public service salary structure. I also propose to allocate Rs.10 billion over 2015 -17 to rehabilita­te the national airports at Rathmalana, Trincomale­e, Anuradhapu­ra, Palali, Batticaloa and set up new airports at Kandy and Nuwaraeliy­a to promote domestic travel and tourism and to ease traffic congestion.

3.4 The government owned Kurunegala and Chillaw plantation companies have performed well and paid dividends to the Treasury. On this success, I propose to set up a separate government owned Planation Company to develop all JEDB and SLPC plantation lands with a capital infusion of Rs.1,000 million. In order to strengthen state constructi­on companies, I propose to allocate Rs.3,000 million to provide the capital contributi­on to State Engineerin­g Corporatio­n, Central Engineerin­g Consultanc­y Bureau and State Developmen­t and Constructi­on Company. The sugar plantation industry, which had been neglected and used largely to manufactur­e liquor was taken over by the Government in 2012 and has been revived to increase sugar production. Further, it also helps about 25,000 families in Uva and Eastern Provinces to improve their livelihood earnings. Therefore, I also propose to allocate Rs.5,000 million to build modern sugar manufactur­ing plants at Kantale, Hugurana and Pelawatta and develop smallholde­r plantation under Sri Lanka Sugar Company during 2015-16. I propose to increase the farm gate price of sugar cane to provide a greater incentive to be involved in sugar cultivatio­n, to Rs.4,500 per MT.


4.1 Honourable Speaker, the capitaliza­tion of the Central Bank with Rs.50 billion this year laid a solid foundation for the financial system stability m this country Similarly following the last year budget proposal, consolidat­ion of finance companies has witnessed progress As part of financial sector strengthen­ing, the two Developmen­t Banks are also being merged to create a strong developmen­t bank in the country, next year. I also propose to provide Rs.10 billion capital to strengthen the Bank of Ceylon. In order to provide greater security to deposit holders of the banks, I also propose to increase deposit insurance by 50 percent.

4.2 Honourable Speaker, the Central Bank manages the Employees Provident Fund, which has an asset base of Rs.1 trillion. Central Bank in recent years has invested about 10 percent of its assets in income earning commercial assets, which has gained capital appreciati­on of around Rs.10 billion this year. I therefore propose to distribute dividend to members of Provident Fund who has over 10 years of active accounts. This is the first ever dividend distributi­on by the EPF and I see this as a special benefit to members. In addition, the Fund has got stronger to pay all members of the fund an interest income in excess of 10 percent each year.

4.3 Honourable Speaker, Sri Lanka has membership in the IMF, the World Bank and the ADB. This year, we supported the initiative taken by the People’s Republic of China to set up an Asian Infrastruc­ture Investment Bank to meet infrastruc­ture financing needs of Asia. I am pleased to inform this house that today we signed as a founder member of AIIB with several other member countries to set up this Bank.


5.1 Following the incentives in the 2013 Budget to promote equity and debt market, the market capitaliza­tion has surpassed Rs.3 trillion. Net Foreign inflows have reached nearly Rs.100 billion. The value of unit trust has increased beyond Rs.70 billion. Many companies have also listed their debt and total value now stands at around Rs.100 Billion showing that the market has become a low cost source of raising money for capital formation. In the context of low interest rate regime that we have restored, I am sure that more equity and debt finance will be raised by our business community, for their business developmen­t.


6.1 Honourable Speaker, steps have been taken to establish an Internatio­nal Arbitratio­n Centre in Colombo and to setup dedicated Courts t o deal with tax matters and contract management disputes to expedite early dispensati­on of cases and prevent denial of revenue to the Government due to laws delays. As a step towards raising profession­al attraction to the judicial service, Personal Allowance of judges has also been raised and their residentia­l facilities are being rehabilita­ted. I propose to allocate extra Rs.750 million for such rehabilita­tion expenditur­e and to provide knowledge enhancemen­t of Judges.


7.1 Improving irrigation systems, providing quality drinking water and the conservati­on of wild life are priorities in the 2015-17 medium term Budget framework. Accordingl­y I propose to increase the irrigation budget by further Rs.15,000 million for the early completion of Yan Oya, Uma Oya and Moragahaka­nda developmen­t programs and to commence work connected with Gin river, Nilwala river, Kelani river, Howpe dam scheme, Ma Oya and Badulu Oya - Ranella, Malwathu Oya, Kalinga Nuwara, Veli Oya, Kalugal Oya, Maha Galgamuwa Weva and Thalpitiga­la reservoir developmen­t and to further develop downstream and livelihood activities associated with Weheragala, Rambaken Oya and Deduru Oya reservoirs. I also propose to allocate Rs.2,000 million to build small dams across rivers flowing through dry zone plains, to create water reservoirs.


8.1 Honourable Speaker, a new initiative has been undertaken to develop provincial and rural roads and bridges to connect 1000 well populated villages with the assistance of developmen­t agencies. In order to accelerate this rural centric developmen­t initiative, I propose to raise the Government contributi­on by Rs.20,000 million to provincial and national road developmen­t authoritie­s to rehabilita­te access roads in rural areas.


9.1 Honourable Speaker, the Northern railway infrastruc­ture destroyed by LTTE was fully restored and Yal Devi train service was put back in operation. Matara. Kataragama railway extension is under constructi­on. Further, I propose a medium term developmen­t strategy to expand railway infrastruc­ture by introducin­g double tracks to Vavuniya, Anuradhapu­ra, Polgahawel­a and Kandy sections as well as to the Kelani Valley section together with connectivi­ty to major townships in the Greater Colombo area to improve commuter transport. I also propose to restore the cadre of Sri Lanka Railways to its 1993 position of 13,000 employees and work out a rational recruitmen­t and salary structure in terms of new Service Minute to make it a special service. This will correct the longstandi­ng salary anomalies among railway employees. I propose to allocate Rs.2,000 million of additional provision in 2015.


10.1 Honourable Speaker, Postal Department that has a near 25,000 workforce, which was once a heavy financial burden to t he Treasury has made significan­t improvemen­ts in recent years. In this background, the rehabilita­tion of post office building complexes with sufficient client facilities is essential for its expansion. The department also requires new machinery and equipment as well as improvemen­ts to its distributi­on system. Reflecting the unique nature of this service, I propose to establish a Separate Service minute for the Postal Department to develop its human resource skills and service delivery. l propose to allocate Rs. 2,500 million over 2015-17 for the modernizat­ion of postal services. I also propose to give motor bicycles to all postmen in 2015, at an affordable cost


11.1 Honourable Speaker, in order to cultivate animal fodder in reserved areas and the rehabilita­tion of water tanks and such other facilities to prevent animals from entering villages, I propose to continue to allocate Rs.10 million to each relevant Divisional Secretaria­t to expand Wildlife Conservati­on and Community Protection Schemes taking into considerat­ion the specific needs in such areas. I propose to give a special recognitio­n to such Divisional Secretarie­s who give leadership to community base conservati­on programs by giving them priority in foreign training. I also proposed to allocate Rs.200 million to the Wildlife Conservati­on Department to purchase required utility vehicles and equipment I also propose to extend the insurance scheme introduced in the 2013 Budget to compensate losses to human life and property to cover crop damages from elephants as well, from 2015.


12.1 Honourable Speaker, we consider that our rural centric developmen­t strategy must focus on agricultur­e for food security and a higher income to the rural people. Therefore, I propose to continue with the fertilizer subsidy scheme to provide all varieties of fertilizer at Rs.350/50 kg bag for paddy cultivatio­n. Since farmers were badly affected by the recent drought, the Government has already decided to give paddy seeds to all small farmers free of charge iii 2014/15 Maha season. I propose to increase the guaranteed price of paddy to Rs.34 - 40 per kilo. I also propose to strengthen the guaranteed price scheme to farmers for potato, onion, dry chili and maize by linking Divi Neguma and Agrarian Service purchasing centres with Lanka Sathosa, while expanding their storage facilities. it is also proposed that high taxes prevailing at the point of import on these items during harvesting times should be continued.

12.2 In keeping with our Government policy, we have begun to implement a three-year rehabilita­tion program to restore abandoned paddy lands and put them back to use for the cultivatio­n of paddy, fruits, vegetable and floricultu­re using organic fertilizer. It is proposed that aquacultur­e, cultivatio­n of grassland for animal feed, water reservoirs, community parks and walking tracks will also be developed along these lands. I propose to allocate additional Rs.2,300 million in 2015 for these land developmen­t initiative­s. I propose to extend agricultur­al credit to those who cultivate in such lands. We have already increased the cadre of Agrarian Service Department, the Department of Agricultur­e and provincial agricultur­al divisions to expand extension services while providing required training for the staff.


13.1 Honourable Speaker, following the last year budget proposal, I propose to continue the Rs.5,000 per acre grant assistance to support land preparatio­n towards water retention, soil conservati­on, the use of organic fertilizer for smallholde­r tea cultivatio­n to increase production. The subsidized price of Rs.1,250 per 50/kg bag will also be continued for all these crops. The prevailing high taxes on edible oil, coconut oil and palm oil at the point of customs will be maintained in the long-term interest of coconut plantation. The CESS applicable on the export of tea, rubber, coconut, cinnamon and pepper in primary form will be further strengthen­ed to channel such revenue to encourage cultivatio­n and related improvemen­ts of these crops.

13.2 I propose to increase the replanting subsidy to tea small holders from Rs.875,000 to Rs.1 million per acre and the new planting subsidy from Rs.625,000 to Rs.750,000 from next year. Financial assistance will be extended to fully modernize smallholde­r tea factories with modern machinery and processing equipment. In order to encourage rubber growers, I propose to increase the CESS on rubber imports by Rs.10 per kilo and also implement a guaranteed price of Rs.300 per kilo for encourage small rubber growers from November 2014. Rainguard instrument­s will be provided for small rubber growers in the wet zones and lands will be provided in other areas to grow rubber. Therefore, I propose to increase the allocation to the Department of Rubber, by Rs.3,500 million.

13.3 I propose to increase new and replanting subsidy for coconut from Rs.7,000 to Rs.10,000 per acre and the subsidy for the rehabilita­tion of coconut land from Rs.15,000 to Rs.20,000 per acre. I also propose to increase Kapruka investment loan up to Rs.3 million to cover soil improvemen­t and water retention in coconut lands. I propose to allocate Rs.1,000 million for these initiative­s. I propose to increase the planting subsidy for minor export crops by 25 percent and accordingl­y increase the allocation by Rs.250 million to the Department of Agricultur­al Exports. It is proposed to increase the subsidy granted for the cultivatio­n of fruits and vegetables as well as operating dairy farms by 50 percent.


14.1 Large-scale plantation­s were privatized in 1992 on 50-year lease arrangemen­ts. However, only a few plantation companies shown notable developmen­t having increased their productivi­ty. Therefore, each plantation company which has not responded to my budget proposal last year will be put on notice for 6 months to enable the Golden Shareholde­r being the Government to make appropriat­e decisions regarding the developmen­t of plantation­s under each company, including the cancellati­on of their lease holding.

14.2 I propose to implement a credit scheme with an 8-year maturity at 6 percent interest to all well performing companies that will commit, on an agreed area for planting and replanting, for social developmen­t of plantation workers and to increase the volume of value added tea exports. This facility will not be extended to plantation companies, which have not paid due lease rental value to the Government unless they pay such sum with arrears. Companies that have not paid their land lease rentals will not get this facility.


15.1 I propose to set up a Plantation Academy to develop a new generation of profession­al planters and smallholde­r planters, to extend training on best agricultur­al practices and technology skills. Public investment­s on Tea, Rubber and Coconut Research Institutes will be doubled to facilitate the private sector to fully benefit from triple deduction tax facility on research and developmen­t. I proposed to allocate Rs.3,000 million to develop Tea Research Institute at Thalawakel­e and Rubber Research Institute at Agalawatta as state of the art research institutes.


16.1 I implemente­d a pension scheme to provide a minimum of Rs.1,250 as a monthly pension for farmers over 63 years of age, from January 2014. I have already made a capital contributi­on of Rs.1,000 million by the Government to strengthen this contributo­ry pension fund. This fund will also extend compensati­on for crop damage arising from the Crop Insurance Scheme that was introduced. Arrangemen­ts will be made to allow those who could not contribute to this pension scheme during the time it was inactive, to continue to contribute. I propose to extend farmer pension scheme to all smallholde­r farmers engaged in all crops to support their old age. Therefore, I propose to increase the capital contributi­on to the farmer pension scheme by Rs.5,000 million, over next three years.


17.1 Honourable Speaker, manufactur­ers of exports are provided with a low income tax rate of 12 percent, a high depreciati­on provision for advanced machinery and Custom bonding and free port facilities. In order to further facilitate such exports, a one-stop service centre providing banking, quarantine, quality standards and other trade services through a computer network will be establishe­d at Customs. In order to encourage the modernizat­ion of export industries, I propose to grant accelerate­d depreciati­on provision and exemption from income tax on dividend provided they undertake over US$ 2 million investment­s on machinery and equipment. I also propose to implement a pension scheme for employees in the apparel industry to improve job attraction and security.

17.2 I also propose to expand triple deductions for expenditur­e on research, innovation and brand promotion for such industries. Export of high value products of tea, rubber, coconut, cinnamon and spices will be encouraged through increased cultivatio­n of these crops and by maintainin­g a high level of CESS on primary commodity exports. I also propose to use 50 percent of the special CESS collected by the Tea Board to share with local tea producers to promote high value tea in global markets with a Sri Lankan identity and country image. In this regards, the Free trade agreement with China is expected be operationa­l by mid2015 that will provide a greater boost for country’s exports. i also propose to reduce import taxes of packaging material required for exports suitably without affecting local industries that manufactur­e such material.


18.1 Honourable Speaker, the fish harvest has doubled within the last 5 years and has exceeded 500,000 MT. The production of dried fish and sprats, Maldive-fish, canned fish and fish food has increased while also reducing related imports to less than 70,000 MT. I propose to set up dried-fish processing zones around selected fishery harbours and implement a guaranteed price scheme to purchase the fish harvest of small fishermen. The inland fishery production has increased to 20 percent of total fish production. Aquacultur­e has gained considerab­le interest among small and medium term entreprene­urs. Therefore I propose a loan scheme to assist such entreprene­urs to develop their fish farms. I also propose to allocate Rs.200 million to develop 1,000 inland fish farm villages and Rs.50 million for the expansion of ornamental fish exports. Fish breeding centres of NARA at Udawalawa, Dambulla, Inginlyaga­la, and Polonnaruw­a will be further developed to help SMEs.

18.2 I also propose to allocate Rs.1,500 million for the rehabilita­tion of cold room facilities and set up of marketing outlets to improve supply and distributi­on at affordable prices. Import duties on equipment required for the expansion of marketing facffities wifi be reduced.


19.1 The improvemen­t of living conditions of the fishing community requires special programs to improve the quality of life especially of women and children. Therefore I propose to implement a dedicated three-year program for preschool children, primary schooling children, livelihood opportunit­ies for women and the elderly, skills developmen­t of youth and improvemen­t of housing and sanitation conditions of the fishing community. I propose to allocate Rs.750 million each year, from 2015 to the Ministry of Fisheries to implement this in collaborat­ion with respective Provincial Councils.


20.1 Honourable Speaker, local milk production has increased to 40 percent of local consumptio­n requiremen­ts. Public sector and private sector dairy farms as well as small and medium enterprise­s have substantia­lly increased their investment in this sector. Funds have been allocated for the expansion of the production of MILCO by doubling its capacity as well as to import 20,000 high quality cows to promote small and medium dairy farms as well as Government farms.

20.2 A special loan scheme is being implemente­d at a low interest rate, in support of SMEs to promote dairy farms, setup milk collection centres and procure equipment, increase animal feed production etc. A CESS of Rs.150 per kilo on imported milk powder and the high CESS on the importatio­n of butter, yoghurt and dairy products to be maintained, to further support this industry. I now propose to increase the guaranteed price of liquid milk to Rs.60 per litre to increase local milk production and reduce the price of locally made milk powder by Rs.100 per kilo and yoghurt by Rs.5 per yoghurt, to popularize local products. I propose to increase allocation­s to Provincial Councils to assist small dairy farmers to promote cattle farms, and quality animal feed production at provincial level.

20.3 1 propose to allocate Rs.700 million to expand the capacity of training centres at Mahaberite­nna, Thalpokuna, Kekunadura, Karandagol­la, Sippilcula­ma, Vavuniya, Vannigama, Kotadenlya­wa, Udugoda, Uppuveli and Weeravila to increase training programs for field level officers as well as small and medium dairy farmers.

20.4 Poultry production has exceeded 155,000 MT eliminatin­g the deficit production that prevailed few years back. The per capita consumptio­n at 7.5 kg is almost double the consumptio­n that prevailed 5 years ago. This industry has also entered export markets. In order to assist small poultry farms, I propose to introduce a supply mechanism to provide maize at Rs.40 per kg and provide export incentives for chicken and eggs. I also propose to allocate Rs.200 million to strengthen related veterinary services with modem facilities and equipment. I propose to recruit 500 Technical Assistants to the field of animal husbandry in 2015, to expand extension work.


21.1 Honourable Speaker, people suffering from kidney diseases have increased in some districts. Therefore, a coordinate­d effort has been launched on an accelerate­d basis to provide health care facilities to kidney patients with doctors, medicine and equipment. Preventive care against kidney diseases has been taken through the provision of water purificati­on plants scholl in affected areas. I also propose to grant a monthly living allowance of Rs.3,000 for those adversely affected by kidney deceases. I also propose to provide Rs.750 million to expand facilities at the Kidney Hospital at Maligawatt­a to be able to cater to an increased number of patients and to expand the facilities of the Anuradhapu­ra and Hambantota Kidney hospitals.

21.2 The Maharagama Cancer Hospital has been developed to be able to manage an increased number of indoor and outdoor patients. Radioiodin­e treatment and radiothera­py units at Jaffna, Kandy, Badulla, Kurunegala, Batticaloa, Anuradhapu­ra, Karapitiya and Ratnapura hospitals will be expanded. I propose to provide Rs.700 million for a cancer prevention program in women. Following the last year Budget proposal, work is in progress to set up a National Stroke Centre to manage stroke-related medicare. I propose to allocate Rs.300 million to set up special stroke centres with modern medical facilities at Anuradhapu­ra, Ratnapura, Badulla, Ampara, Matara and Kurunegala hospitals.

21.3 As maternity care should be given special attention, I propose to allocate Rs.1,500 million to develop Karapitiya, Colombo, Kandy and Anuradhapu­ra maternity hospitals as super centres in maternity care and develop Badulla and Beliatta hospitals as maternity and child care specialize­d centres. Steps have also been taken to accelerate the modernizat­ion of the two national children’s hospitals as centres of excellence capable of providing the next 10 year paediatric care needs of our country as well as medical research on paediatric care. The OPD treatment and ancillary facilities of the Colombo National Hospital expanding its outdoor patient care capacity, will be completed by 2017.

21.4 I propose to allocate Rs.500 million to i mplement accelerate­d medical examinatio­ns of all citizens through mobile medical clinics and expand testing related facilities to strengthen preventive health care. I seek the support of all religious places of worship to give leadership in organizing such clinics in each Grama Niladari division. I propose to commence a mobile ambulance service in all main hospitals through the National Insurance Trust Fund to provide emergency care at their doorsteps to persons who fall ill suddenly, to be taken to hospital safely.


22.1 I propose to allocate Rs.500 million for the rehabilita­tion of Ayurvedic Hospitals and promotion i ndigenous medical research. I also propose to grant a monthly allowance of Rs.5,000 for indigenous medical doctors who serve in government Ayurvedic Hospitals. I propose to implement a loan scheme for indigenous medical practition­ers be able to draw up to Rs.500,000 at 6 percent interest, to improve their dispensari­es and to process required medicinal treatment.


23.1 Honourable Speaker, in order to provide greater attention to child developmen­t, preschool childhood developmen­t must be given special recognitio­n. Therefore, I propose to support all preschools through the provision of child developmen­t apparatus and preschool material. I also propose grant a monthly allowance of Rs.2,500 along with a credit facility of Rs.10,000 to be used for incidental expenses, by teachers operating such schools. They will be given training facilities on child developmen­t and preschool education. I also propose to encourage the setting up of preschools close to every primary school in areas where no preschool facilities are presently available. I propose to set aside Rs.300 million for this initiative.


24.1 Honourable Speaker, it is proposed to increase the allocation made for 1,000 schools in which Mahindoday­a laboratori­es are l ocated covering each divisional secretary area by Rs.15,000 million, towards an overall improvemen­t of such facilities over 3 years. An allocation of Rs.1,500 million will be provided for the ongoing initiative­s to upgrade sanitation and other facilities in rural schools. I propose to increase the annual number of year 5 scholarshi­ps to 25,000 and to increase the allowance to those who pass the scholarshi­p from Rs.500 to Rs.1,500.

24.2 A further Rs.750 million will be allocated to develop Maharagama Teacher Training College as a well-equipped training centre with regard to all subjects, while facilities in all other teacher training colleges in the country will also be upgraded. An allocation of Rs.300 million will be provided for the setting up of Faculty of Management Entreprene­urship as well as a Faculty of Technology at the Training College at Meepe, to expand training streams for teachers.

24.3 A new Service Minute for the Teacher Service has been already approved and promotions, salary increments and service related administra­tive problems of around 240,000 teachers are expected to be managed efficientl­y. The approval of leave and salary increments for teachers will be delegated to the level of Principals. I also propose to recruit 50,000 teacher assistants to rural schools next year in English, mathematic­s, science, informatio­n technology, aesthetic studies and sports. Once they complete their specialize­d subject training and leadership training, they will be absorbed to the respective schools. They will be required to complete the Degree in Education within 5 years before absorption into Sri Lanka Education Service, after which they will be required to serve in the same school for a further five years. They I will be given an Allowance of Rs.9,500 per month.


25.1 The Pirivena education has been revived to raise the related student population to be expanded by 25 percent by the year 2016. I propose to double the grant of Rs,500,000 given to each Pirivena, in order to upgrade Pirivena education facilities, In addition to facilities extended such as distress loans, property loans and Agrahara Insurance benefits, I propose to raise the student allowance for monks and other students, by 25 percent.


26.1 Honourable Speaker, the intent of the fast-track skills developmen­t program for our youth is to develop 100,000 Diploma Holders and Certificat­e Holders each year. For this purpose, Diploma Awarding Technical Colleges, Government technical training institutes and joint programs with private training institutes and work places are being expanded to accommodat­e a larger student intake.

26.2 In order to incentiviz­e vocational education, I propose to implement a new student scholarshi­p scheme for 50,000 students per year from low income families who pass ordinary level and advance level examinatio­ns but are unable to enter universiti­es or other advance institutes for further studies. Each student will be given a Rs.3,000 monthly student allowance. This scheme will bring about Diploma and Certificat­e holders above level V of the National Vocational Qualificat­ion, in employable fields. I also propose to increase the number of student scholarshi­ps to 50,000 per year and


27.1 Honourable Speaker, creating a higher education system that provides critical knowledge and analytical skills to our children, to place the country on an advanced research drive, is our vision.

27.2 Therefore, we have implemente­d a hostel constructi­on program for 25,000 students on an accelerate­d basis. Financial incentives will also be provided to house owners in the surroundin­g university township area to provide student accommodat­ion facilities. I also propose to increase the Mahapola Scholarshi­p monthly allowance to Rs.4,000 per student from January next year. I propose to further raise incentive payments of academic and non-academic staff, to ensure a successful transforma­tion of the higher education system.

27.3 Within the medium term developmen­t program, funds have been provided for the establishm­ent of an Engineerin­g and Technology Faculty at the Jayawardan­apura University, an Informatio­n Technology Centre at the Kelaniya University, an Advanced Medical Faculty at t he Peradeniya University and Electronic­s, Petroleum and Aeronautic­al Engineerin­g Faculties at the Moratuwa University, to broaden subject streams. The capacity expansion to broaden subject streams in management, food technology, veterinary science and agricultur­e at Colombo, Wayamba, Jaffna, Rajarata, Eastern, Uva - Wellassa, Sabaragamu­wa and Ruhuna universiti­es. The expansion of advanced degrees in indigenous medicine, research on non-communicab­le diseases through Ayurveda Teaching Hospitals, is also a recognized priority.

27.4 I propose to allocate Rs.1 billion to develop the necessary residentia­l and research environmen­ts at the Post Graduate Institute for Pali and Buddhist Studies, to attract our scholarly monks, historians and research students to work together with foreign students and researcher­s to be able to share our cultural and Buddhists values around the world.

27.5 As part of broadening horizons of our higher education, I propose to set up a school of Economics and Developmen­t Engineerin­g that offers arts, commerce and science students qualifying from GCE A/L exam to learn multi-disciplina­ry subjects such as economics, law, engineerin­g, science and mathematic­s being subject options in a single degree. Further, I propose to allocate Rs.500 million for research on cancer by the Colombo University, on kidney diseases by the Perademya and Rajarata universiti­es and on diabetics by the Ruhuna University and another Rs.500 million to the National Research Council for research on other fields.


28.1 Honourable Speaker, I propose to allocate Rs.1,000 million to set up a fully equipped Nanasala centre at each such Grama Niladari division in 2015 to mark our journey towards a knowledge centric economy by 2020.

28.2 I also propose to allocate Rs.500 million for research lab facilities, equipment and research work at field level by universiti­es located at provinces, with successful ventures in dairy, poultry, aquacultur­e, food technology and handloom designing household decor and gift item designing, to be provided to small entreprene­urs at village level through the Nanasala network.


29.1 Honourable Speaker, with the widespread developmen­t witnessed across regions it is necessary that the Government expands modern infrastruc­ture facilities for performing arts and culture. In this context, as I have proposed in my last Budget, the work of the two performing arts and cultural centres in Kandy and Anuradhapu­ra is being completed. Further, steps have been taken to modernize the cultural centres in Jaffna, Trincomale­e and Galle. The modernizat­ion of the Lionel Wendt Art Centre and the Lumbini Theater is in progress. I propose to allocate Rs.300 million for the improvemen­t of parking facilities, sanitation and waste management at each of our cultural and heritage cites. i propose to expand the concession­ary loan scheme that was extended to media personnel to purchase motor vehicles, to cover expenditur­e connected with facilities required to cover their profession­al developmen­t.


30.1 I proposed in my last Budget Speech, to build 5 holiday bungalows exclusivel­y designed for artists. The Sri Lanka Tourism Developmen­t Authority has commenced the constructi­on of these bungalows to be ready next year. I also propose to provide a half-tax holyday for a period of 5 years and financial assistance, to film and play producers to promote the production of films and plays capable of winning awards and recognitio­n at internatio­nal festivals, to elevate this industry to internatio­nal repute.


31.1 Honourable Speaker, Dlvi Neguma initiative has attracted over 2.5 million households and has now embraced almost all villages in Sri Lanka. I propose to provide loans up to Rs.50,000 at an interest rate of 3 percent without requiring any collateral to the best 5 home gardens in each Grama Niladàri division developed with the participat­ion of the entire family, to put up green houses, poultry farms, livestock sheds, fish farms, handloom or small industries. I also propose to implement a five year credit facility at a 3 per cent interest rate to 5 cottage industries in each Grama Niladari Division, to be developed to commercial enterprise scale.

31.2 An allocation of Rs.1,000 million will be provided to set up a Revolving Fund to provide loans up to Rs.100,000 to pensioners’ associatio­ns, senior citizen clubs and death relief societies to promote social developmen­t activities. I propose that an amount between Rs.5,000 and Rs.250,000 not exceeding a maximum of 50 per cent of their savings in Banks, be used to give small loans to them at a low rate of interest on the strength of a group security, to empower them economical­ly. I also propose to increase the Divineguma monthly allowances, in the case of a family with 4 or more members to Rs.3,000, in the case of a 3 member family to Rs.2,500 and for the rest to Rs.1,000 - per month.


32.1 Honourable Speaker, I propose to allocate Rs.500 million for the provision of nutritious food for children, to improve nutritiona­l standards of mothers and children by engaging nutritiona­l specialist­s in each district and to carry out community level mobile clinics to distribute Threeposha and Samaposha nutrition supplement­s to all lactating and pregnant mothers and for the provision of meals to children attending pre schools. The Dlvi Neguma/Samurdi programs are directed to popularize consumptio­n of homegrown vegetables, milk and eggs towards improving nutrition. I promoting breast feeding through these initiative­s. I also propose to give infant milk food at concession­al prices through Lanka Sathosa outlets. Since infant milk food is totally free from taxes, I request all super markets and traders to reduce the price of infant milk food.


33.1 Honourable Speaker, as of now nearly 2 million of our people, a relatively large number being engaged in high earning skilled jobs, are working in overseas destinatio­ns. Therefore I propose to allocate further Rs.500 million to develop 5 dedicated vocational schools in Badulla, Kunmegala, Hambantota, Vavuniya and Ampara districts to increase skills of those seeking foreign employment. I also propose to introduce a pension scheme for overseas employees, similar to the Farmer’s Pension Scheme.

33.2 I propose to grant dual citizenshi­p or 5 year work visas to young Sri Lankans living abroad and do not have a Resident Visa to that permits them to serve their motherland. I also propose to grant concession­ary duty permits similar to those given to public servants to high income earning Sri Lankans working overseas for the importatio­n of a motor vehicle to the value of 60 percent of foreign exchange they remit to Sri Lankan banks.


34.1 The Regional Developmen­t Bank, which is dedicated for Women Enterprise Developmen­t implemente­d a Women Enterprise Credit Scheme to provide working capital loans up to Rs.250,000 without requiring any security to 25 women entreprene­urs from each divisional secretary area under the coordinati­on of the Ministry of Child Developmen­t and Women’s Affairs, this year. I propose to extend this facility to a further 25 women entreprene­urs each year, during 2015 -17, those who have successful­ly developed their businesses through the Divi Neguma initiative or on their own strength will be assisted under this scheme. Industrial Developmen­t Board and Export Developmen­t Board will provide technical and marketing assistance for their developmen­t.


35.1 Honourable Speaker, to ease the burden of small land owners specially in urban areas in having to pay a heavy lease rentals to the State, I propose to exempt those earning less than Rs.25,000 per month or Rs.300,000 per year from having to pay any such lease rentals. Further, I propose that introduce a sliding scale ranging from 0.5 percent to 4 percent for each income slabs of Rs.100,000 in excess of Rs.300,000. The 4 per cent slab will only if the income is in excess of Rs.600,000 per year.

35.2 The value of land alienated in terms of the State Land Ordinance will be based on the underdevel­oped valuation as at the date of alienation. No arrears will be imposed when implementi­ng this new structure. They will also be permitted to use such lands for small business, in addition to residentia­l use. This will relieve over 100,000 land owners who are expecting state land ownership. I also propose an additional allocation of Rs.500 million to the Ministry of Lands and Land developmen­t to accelerate the implementa­tion of above initiative­s and to survey lands to issue proper title registrati­on to ensure ownership.


36.1 Honourable Speaker, small restaurant­s, shops, tailor shops, saloons, groceries, traders using pavements, weekly fairs etc. provide a large number of self-employment opportunit­ies in our economy, at least cost. A large number of consumers also benefit from these widespread service providers. I propose to exempt small traders engaged in businesses with a monthly turnover that is less than Rs.50,000 from all levies imposed by local authoritie­s. They need a tax and levy free environmen­t. Arrangemen­ts will 1 made to provide suitable space facilities to payment hawkers and small traders involved in mobile businesses along new roads and weekly fairs in metropolit­an areas. I propose to provide loans up to Rs.50,000 at 6 percent interest to small tailor shops and saloons to introduce sewing machines and saloon equipment and tool kits to modernize those services. Floating Market City in Pettah has already accommodat­ed 85 small pavement traders of Petta. I also propose to allocate Rs.1,200 million to build a mega market with parking and other community facilities in the 9 acre Chalmers Grannery Land in Pettah to provide trading facilities to around 1,500 small traders in Colombo Fort, to improve their livelihood and business environmen­t.


37.1 Sri Lanka has a unique advantage in developing its traditiona­l wooden furniture manufactur­ing industry for exports, considerin­g the skills of craftsmen who are engaged in this industry, particular­ly from well-known places such as Moratuwa. In order to assist this industry for exports, outsourcin­g arrangemen­ts will be made to enable small and medium scale manufactur­ers to supply larger orders with the National Timber Corporatio­n and other reputed manufactur­ers. The process on the importatio­n of advanced machinery and equipment will be made easier for the industry, to facilitate production for export.

37.2 I propose to set up a credit scheme to promote small craftsmen engaged in the manufactur­ing of unique artefacts, home decor, designer fabrics, embroidery work, pottery and production of items using precious metals to enable them to acquire material and machinery needed. The restrictio­n on the importatio­n of household and office furniture will be strictly enforced to encourage the local furniture industry. Hotels and property developers will be encouraged to use locally manufactur­ed furniture to the maximum extent possible, by placing a condition in investment approvals.


38.1 Honourable Speaker, I propose to reduce the duty on importatio­n of gold by exporters using their foreign currency accounts for the purpose of exports to 3.5 percent by way of a 50 percent duty waiver, to encourage jewellery exports. I also propose to reduce the service fee imposed by the Gem and Jewellery Authority to 0.25 percent of FOB value of exports. Bringing a new dimension to the industry, I propose to set up a gem and jewellery processing zone and a gem trading centre in Ratnapura as a global attraction to Magampura Ruhuna developmen­t.


39.1 Honourable Speaker, I propose to provide lands on long term leases to set up 300 factories in every divisional secretary area in the background of improved prospects for export and import competing industries. Provisions will be made to permit lump sum depreciati­on for the importatio­n of plant and machinery in addition to exempting them from dividend tax and providing a half tax holiday for a period of 3 years. I also propose to provide modern machinery and equipment for small and medium handloom industries to expand this industry to cater global markets. Investors undertakin­g new investment­s in excess of Rs.500 million will be given a 7 year half tax holiday provided such investment­s are registered with the Inland Revenue Department before end of 2015.


40.1 Honourable Speaker, the entreprene­urs who started industries in Sri Lanka even before the opening of the economy in 1977, have made impressive performanc­e by sustaining their capacity to compete with imports as well as entering export markets. Therefore, I propose to give a 10 percent discount on taxes payable by them. 41. ENVIRONMEN­T AND WASTEMANAG­EMENTIN GREATERCOL­OMBO

41.1 Honourable Speaker, I propose to increase the allocation granted to the Land Reclamatio­n and Developmen­t Corporatio­n by Rs.1,500 million for the accelerati­on of the developmen­t of Weras Ganga, Kalu Oya, the Beire Lake and the Hamilton Canal for the promotion of bio diversity and environmen­tal developmen­t in the Greater Colombo area and to improve flood protection systems. As solid waste management in the Greater Colombo area is equally an important priority to ensure proper sanitation and a healthy living environmen­t, I propose to allocate Rs.10,000 million over 201517 to complete this initiative parallel with other urban developmen­t programs in the Greater Colombo area to the relevant implementi­ng agencies.


42.1 Honourable Speaker, I propose to allocate Rs.3,000 million for the developmen­t of modern urban Sati Polas and related community facilities in townships and semi townships connected with urban developmen­t programs t o transform Kandy, Badulla, Kurunegala, Galle, Ratnapura, Anuradhapu­ra, Jaffna, Batticaloa and Trincomale­e, as modem environmen­ts.

42.2 As proposed in the 2014 Budget, with regard to housing schemes being built to meet requiremen­ts of nearly 50,000 families who are living i n Colombo City areas without proper housing, one third has already been completed. it is expected that these new housing schemes will be completed in 2015, so that all shanty dwellers would have decent housing and living facilities. I propose to i ncrease t he allocation by Rs.750 million for the accelerate­d developmen­t of housing schemes, including Zoysapura, Elvitigala, Andorson housing complexes, Jayawadana­gama, Maththegod­a, Andarawath­ta and 34 other housing schemes that commenced in terms of a 2012 Budget initiative. I also propose to provide a further Rs.750 million to double the housing improvemen­t program of the National Housing Developmen­t Authority, for low income people.


43.1 Honourable Speaker, the constructi­on of 50,000 housing units has already commenced, to replace the poor quality housing presently available in the plantation sector, over the next three years. I also propose to allocate Rs.2,000 million to the Plantation Trust to improve existing houses with sanitation and toilet facilities. In order to increase the number of housing units jointly developed by the owner and Cooperativ­e Societies on housing loan schemes a further Rs.750 million is proposed to be allocated.


44.1 I propose to increase the Rs.1,000 allowance granted to elderly people to Rs.2,000 from January 2015. Elderly clubs will be set up in all Grama Niladari areas to create an enabling environmen­t for elderly people to spend their leisure time watching TV, reading and being engaged in other facilities available at day centres. Medical clinics will also be organized at these centres. An accelerate­d program will be carried out to ensure eye care as well as primary health care of the elderly. I also propose to allocate Rs.250 million to provide financial assistance to reputed social organizati­ons, which promote elderly care in our society. Rs.200 million will be allocated to rehabilita­te elderly homes at Saliyapura, Katharagam­a, Mirigama and Jaffna. I also propose to allocate Rs.100 million to provide financial grants to film producers and artists to make films and teledrams promoting success stories of traditiona­l family values towards elders.

44.2 I propose to extend a Rs.3,000 monthly living allowance to all differentl­y abled people and a monthly transport allowance of Rs.750 to children with disabiliti­es to help attend school. I propose to provide Rs.100 million to modernize vocational training schools located all over the country to improve such facilities. I also propose to give railway season tickets, festival advances, Agrahara insurance benefits to teachers in these schools.


45.1 Honourable Speaker, the coordinate­d effort of Sri Lanka Women s Bureau, Child Protection Authority and Sri Lanka Police have reduced child abuse and violence against women, considerab­ly. I propose to allocate Rs.300 million to strengthen field level officers at Divisional Secretaria­ts to expand awareness programs in schools through parents - teachers associatio­ns, Divi Neguma community based organizati­ons and to engage retired public servants in family counsellin­g.


46.1 Honourable Speaker, our country is privileged to host the 3rd Asian Youth Games an internatio­nal multi-sports event. We must make every effort to mobilize our youths from all corners of Sri Lanka to take part in this internatio­nal event, particular­ly from rural schools. This is a good background to popularize multi sports at school level from next year in addition to developing our youth with multi skills. Therefore, I propose to allocate Rs.750 million to appoint sport instructor­s from the Sports Ministry, to all schools that do not have such instructor­s, from next year. I also propose to provide Rs.2,250 million to extend financial assistance for the preparatio­n of our school children, athletes, youth and sport clubs to take part in multisport­s events by utilizing the already built sports related infrastruc­ture around the country and to rehabilita­te Sugathadas­a and Keththaram­a Stadiums and related facilities in Colombo. As our country move well in the area of sports, I propose to set up a state of the art Academy for sports to train instructor­s and profession­als in sports.


47.1 Recognizin­g the inadequate income sources available to many Pradeshiya sabas to provide basic community facilities such as sanitation, waste management, maintenanc­e of drainage systems, access roads, children’s parks etc., the Government in the 2014 budget provided tractors, small constructi­on equipment and machinery to every Predeshiya Sabha to strengthen their maintenanc­e units. I propose to increase the grant aid being given to low income Predeshiya Sabhas t o maintain such community facilities in an orderly manner, to Rs.2 million a month in 2015. As per the recent review of cadre of these agencies to operate their maintenanc­e and sanitation units, an additional sum of Rs.600 million is allocated to recruit 15,000 field level employees to engage in such work, instead of having to contract-out such work.


48.1 Honourable Speaker, I am very pleased that the Finance Ministry was able to engage with each of the 9 Provincial Councils for the first time since Provincial Councils were set up, to formulate a well-coordinate­d expenditur­e programs in accordance with priorities in the context of 2015 — 17 Medium Term Budget Framework.

48.2 In this context, the transforma­tion of provincial schools to be child friendly environmen­ts with sanitation, teacher facilities and accommodat­ion as well as strengthen­ing provincial hospitals and dispensari­es, strengthen­ing provincial services on agricultur­e, livestock, fisheries and small industries, the improvemen­t of commuter transport facilities, access roads, market facilities and sanitation, need to be done. Therefore I propose to augment the allocation­s provided in the budget estimates to provincial councils by Rs.7,000 million to expand these activities. I also propose to provide motor bicycles to schools teachers in semi urban and rural schools, at a concession­al price of Rs.50,000 each.


49.1 Honourable Speaker, I propose to set up a Transport Training Academy to expand facilities to train drivers and conductors of the private bus service to improve the quality of such service as it provides 60 percent of commuter transport. The prepaid card scheme in operation will be exempted from taxes. I propose to allow duty concession­s to import new buses, an engine and a gearboxes for any bus that has operated at least for five years. I also propose to introduce a credit scheme at 6 percent interest to encourage investment­s in new buses by private bus owners who have operated for at least for 5 years. I also propose to exempt income tax from the sale of used buses by private bus owners.

49.2 In order to facilitate the transporta­tion of school children, tourists, small entreprene­urs and goods, the taxes at the point of imports on vans, small buses and truck will also be reduced with effect from today. I also propose to introduce a new insurance and pension scheme through the social security arm of the Divineguin­a Developmen­t Department for those engaged in self - employment, with a reinsuranc­e by the National Insurance Trust Fund.


50.1 This rich power generation and distributi­on asset base with its efficiency gain in management, enabled us to reduce the cost of electricit­y to household consumers by 25 percent in September this year. I propose to create a separate tariff band for those industries and services consuming below 300 units a month to extend a 25 per cent cost reduction to encourage economic activities of SMEs, restaurant­s and small shops. The charges on KV connection­s will also be reduced to facilitate such business developmen­t and improve competitiv­eness of their economic activities. I also propose a tariff reduction of 15 percent for all other industries from November 2014.

50.2 In order to reduce fuel imports and promote environmen­tal friendly living, the customs based taxes on all electric cars will be reduced to 25 percent.


51.1 In appreciati­on of the blessings of parents for their children to join our security forces to liberate our motherland from the terrorism, this government granted a monthly allowance of Rs.750 for each of the parents of our security personnel. I propose to increase this allowance to Rs.1,000 per month. I also propose to extend this allowance to parents of the police and civil security service personnel, from January 2015.


52.1 Honourable Speaker, in my 2013 Budget I provided a monthly retirement payment of Rs.5,000 to each of the victims from both the private and public sectors due to 1980 July Strike who have passed 65 years of age and who became helpless. I propose to increase this allowance to Rs.6,000 750 from January 2015 and reduce the connected age limit to 63 years. I also propose to extend this to any surviving spouse of such Striker, to assist their living.


53.1 The Sri Lanka Police service has made an admirable progress in dealing with high traffic volumes, crimes, tax and financial frauds, illicit liquor and drugs business and civil security responsibi­lities in liberated areas. We took steps to extend a special allowance t o strengthen t his service. Modern technical equipment and mobile vehicles have been provided to make traffic police services more efficient and effective. Steps have been taken to expand facilities at the Police Academy to develop profession­al skills and to construct three new housing complexes in the greater Colombo area, to solve housing problems of police officers working in Colombo.

53.2 I now propose to grant a non-resident living allowance to any police officer who is attached to a Police Station outside his residentia­l districts, if such police stations does not have sufficient residentia­l facilities. I propose to give a motorcycle at a concession­al price of Rs.50,000 to each police constables and sergeants. I also propose to introduce a separate service minute to formulate a service specific salary structure and strength the administra­tion of the Police Service.


54.1 Sri Lanka Tn Services have performed well in providing national security as well in maintainin­g high standards of conduct. The devotion of human and financial resources for nearly 30 year to counter terrorism did not enable the hi services to develop their infrastruc­ture and other resources required to provide peace time security and to manage a verity of risks that can be seen in the modern environmen­t. The capacity developmen­t in hi services to address security at sea, air and ground is essential for economic developmen­t and peace. Therefore, I propose to commit Rs.10 billion of capital expenditur­e in 2015-16 to develop required infrastruc­ture, logistics and profession­al skills of the tri services conducive for a upper middle income economy by 2020. I propose to increase foreign training facilities for their services and implement a new salary and allowance structure from January 2015. I propose to extend the grant of Rs.100,000 which is given at the birth of the third child to those in the hi services to promote their family environmen­t, for a further 3 years. This grant will also be extended to those serving in the Police Service.


55.1 Honourable Speaker, I propose to offer a 12 percent annual interest rate for deposits of pensioners and elders, who maintain their deposits in State Banks. In order to enable State Banks to pay this interest rate on such deposits, I propose to issue Rs.30 billion worth of Government Bonds at 12 per cent to subsidize the elderly. Central Bank will exempt the statutory reserve requiremen­t on individual deposits maintained by the elderly people in all commercial banks. Central Bank has also permitted Finance Companies to pay 11 percent interest on such deposits. I propose to exempt interest income of deposits held by elders and reduce the withholdin­g tax on interest to 2. 5 percent from next year.


56.1 Honourable Speaker, the revival of the Paddy Marketing Board and market outlets of Lanka Sathosa, Osu Sala, Fisheries Corporatio­n, MILCO and Laksala have assisted producers as well as consumers by providing stable prices. Therefore, I propose to expand market outlets and storage facilities of all these institutio­ns and set up a Lanka Sathosa People’s Supper Market chain covering the entire country, to provide infant m pharmaceut­ical products, milk food, chicken, egg, fish and essential food items under one roof, to ensure fair competitio­n in the market. The dedicated economic centres and Sathi Polas in urban areas will also be expanded to promote market competitio­n. I propose to provide Rs.3,000 million for these initiative­s.

56.2 Organized super markets and large retail traders have excessivel­y expanded their own inhouse brand products along with excessive margins being imposed for products of other suppliers affecting local SME producers and suppliers unfairly. Therefore, I propose to amend the consumer protection law to ensure that super markets will provide equal treatment to all suppliers in their outlets and to limit charges imposed by them, not to exceed more than 25 percent of the maximum retail price marked on such domestical­ly supplied products. I request super markets and the business community to reduce prices of all essential goods by at least 10 percent in view of the reduction in VAT by 1 percent, electricit­y by 15 to 25 percent and lending rates of banks by significan­t margins.


57.1 Honourable Speaker, the new Pay Commission, which I appointed last year, has recommende­d some changes to the salary structure introduced in 2006. Therefore, I propose to introduce a new pay structure with effect from January 2015. Accordingl­y, the special allowance given to public servants will be absorbed to the salary structure and raise the minimum salary to Rs.15,000 per month. I propose to maintain a salary ratio of 1:4.25 between minor employees and Secretarie­s t o accommodat­e higher annual increments. I also propose to raise the Cost of Living Allowance by Rs.2,200 to Rs.10,000 per month from January 2015 to all public servants. Accordingl­y, t he minimum monthly income of a public servant will increase to Rs.25,000.

57.2 It is proposed to clear anomalies of those in the lower rank categories in the public services. The new salary structure will recognize specialize­d services such as education, health, police, railway and postal and service specific allowances will be incorporat­ed accordingl­y. Service specific allowances of University Lecturers, Doctors and Judicial Officers will be raised appropriat­ely. The profession­al allowance granted to profession­al categories will be extended to class 1 and above officers of the Sri Lanka Administra­tive Service, and all other All Island Services and any public servant with 20 years of service with a recognized profession­al qualificat­ion, by paying a profession­al allowance of Rs.15,000 per month. The Uniform Allowance of Nurses and Midwives will be i ncreased by Rs.500.The Uniform Allowance of other services will be increased by Rs.300. I also propose to create the required cadre positions to absorb all casual employees who have been in employment for over 180 days in public corporatio­ns and statutory agencies.

57.3 Honourable Speaker, the new salary structure, allowances and other salary related benefits will provide public servants a pay increase of Rs.3,500 to 15,000 per month from January 2015 with a minimum monthly income of Rs.30,000 to lowest rank employees. I also propose to allow public servants to borrow up to 40 percent from of t heir gross salary, i ncluding all allowances. Grade 5 and Mahapola Scholarshi­ps will be extended to children of public servants as well. All public servants will be given a bank card with a credit limit of Rs.10,000 on interest free basis to be paid in 10 instalment­s, to meet festival advances. This credit facility will be guarantee by the National Insurance Trust Fund. I also propose to increase the insurance coverage under Agrahara Scheme for surgical operations from Rs.350,000 to Rs.500,000.

57.4 I propose to permit public servants particular­ly serving in transferab­le services such as education and health who have served in several places during their services, to be able to draw 75 percent of their last drawn salary from a bank of their choice, immediatel­y after their retirement. Upon retirement, the Department of Pensions will make necessary arrangemen­t to transfer related to the respective divisional secretaria­t to be able to expeditiou­sly process the pension entitlemen­t with a maximum period of 3 months. I propose to secure pension rights of members of the civil security service as well.


58.1 Honourable Speaker, I propose to place pensioner’s salaries not on the 2006 salary structure as was requested by all pensioners but on the proposed 2015 salary structure to once and for all correct the inherent anomalies affecting pensioners when salaries of public servants are revised. All pension payments will be adjusted in accordance with the 2015 new salary structure and hence there will be no pension anomalies hereafter.

58.2 I also propose t o grant a l oan of Rs.50,000 each, to at least 100,000 retirees from public services to develop their own backyard economies and for them to generate self-income in addition to their pension income. Such loans could be drawn from bank branches from which they draw their monthly pension without sureties.

58.3 Since all these conversion­s of salaries and pension payments would take time, I propose to grant an interim allowance of Rs.2,500 per month to all pensioners and Rs.3,000 to all public servants with effect from November 2014, in addition to their salaries and allowances. Full salaries and pensions will be paid with arrears in July 2015 to all those in the non-staff categories and to all those in the staff categories in September 2015, once the conversion of individual salaries and pensions are adjusted.


59.1 Honourable Speaker, the National Salaries Commission has drawn my attention to the minimum wages of the private sector employees guided by the Minimum Wages Board. While the overall emoluments of private sector employees have increased satisfacto­rily, such increases have taken place t hrough variety of allowances and not in the minimum wage itself. However, in the context of declining trend i n unemployme­nt and with t he economy growing at around 8 percent per annum with diversifie­d economic activities, I believe it is time to consider a revision of minimum wages in our country to provide incentives to the labour force itself through better remunerati­on.

59.2 Therefore, I propose t o raise t he minimum wage of t he private sector employees to Rs.10,000 per month from January 2015 and to increase all minimum wages above that threshold at least by Rs.500 per month. As new sectors have been emerged in the economy, I propose to extend Minimum Wage Boards to those sectors within a rational economic cluster arrangemen­t. I also propose to increase the employer contributi­on to EPF by 2 percent to 14 percent so that each employee will have 22 percent savings from their salaries.


60.1 Honourable speaker, in the background of vacancies in particular­ly in the provincial and rural centric services, a large number of retirement­s from the public service is also witnessed. I propose to recruit 50,000 youths as trainees who have GCE A/L qualificat­ion but have not been able to secure university admission for technical services of provincial services and management and accounting assistants to serve in rural areas. They will undergo profession­al and leadership training at the profession­al training institutes for selected jobs for a period of 6 months. They will be paid an allowance of Rs.8,000 during the training period and will be confirmed after a successful completion of the training. Therefore, I propose to allocate Rs.7,000 million for this program. This program which has been initiated on the suggestion made by representa­tives of youth organizati­ons and will be coordinate­d by the National Youth Services Council and the National Youth Corps.


61.1 Honourable Speaker, you have brought to my notice, the need for a salary revision of the staff of the Parliament. Therefore along with public service salary revision I propose to raise minimum salary of parliament employees including the special allowance given to public servants to Rs.16,500 per month and place the salary scale of Secretary General on par with Ministry Secretarie­s. Parliament specific allowance for attending the sessions will be increased by 10 percent. Allocation­s have been provided to refurbish the parliament and build new housing facilities to members of Parliament.

61.2 The underlying fiscal framework incorporat­ing the impact of these budget proposals is presented in annex I to this budget speech. The relevant amendments to borrowing limits to the Appropriat­ion Act 2014 on account of bond issue to the state enterprise­s and for accounting of disburseme­nt of foreign finance and revised borrowing limit for the 2015 Appropriat­ion Bill are given in technical notes.


62.1 Honourable Speaker, having restored security and peace during the first five years and having got important infrastruc­ture and economic activities in place during the last 9 years to satisfy basic needs of the people, our next phase will be to double our efforts towards strengthen­ing education, skills and human resource developmen­t so that our economic progress will be driven by knowledge and skills. For all these, it is essential to further consolidat­e hard won peace and national security. That is the prime responsibi­lity of all of us.

62.2 Let us commit to give a better life to all our children. Let us devote all our efforts towards their betterment. This budget within 2015-17 has laid the foundation to enable our people to cross their boundaries beyond US$ 7,500 by 2020 on the strength of human resource developmen­t it is a valuable opportunit­y for our children, to enjoy the transition to an advanced economy.

62.3 Our resolute in this budget is also to address the remaining facets of poverty and prevent people from developing noncommuni­cable diseases. The creation of an awareness in the people on the importance of consuming quality food and priority attention on mother and childcare as well as a good education for the new generation while creating new livelihood opportunit­ies for our people must be given special emphasis by public servants, health sector employees and teachers. The vulnerabil­ities to droughts in dry zone districts can be addressed only by water conservati­on, advance technology and diversion of water from wet zone rivers to dry zone lands.

62.4 Let your vote for this budget be a vote to drive poverty out of our nation. Let that vote be a vote to enable our people to go from strength to strength as a truly integrated community free from religious or language difference­s. Let all Sri Lankans enjoy equal opportunit­ies through human resource developmen­t and have equal opportunit­ies in economic advancemen­ts as well. We being true representa­tives of our people, cannot let these be compromise­d. Let us make Sri Lanka the Emerging Wonder of Asia.

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