Next year’s budget success hinges on ambitious revenue targets, but a drop in economic growth, acutely shows the defeatism on the part of this nation.

Chief Regulatory Officer at CSE Renuke Wijayawardhane presenting the listing certificate to Executive Chairperson at Renuka Hotels Shibani Thambiayah

Sri Lanka’s 2005 budget contained several measures to raise revenue and an ambitious target of cutting the revenue deficit to 1.3 percent of GDP from – 3.7 percent this year, and keeping the overall deficit at 7.6 percent of GDP. Sri Lanka’s 2005 budget contained several measures to raise revenue and an ambitious target of cutting the revenue deficit to 1.3 percent of GDP from – 3.7 percent this year, and keeping the overall deficit at 7.6 percent of GDP. The Fiscal Responsibility Act released concurrently with the budget, also gave a tacit undertaking that the government would not print money next year, and ‘avoid demand fueled inflation’.

“Positive interest rates will be ensured in conducting monetary policy to sustain a balance between savings, investments and monetary growth will be managed at a level consistent with inflationary targets,” the statement said.

Perhaps the strongest reform measure contained in the budget is bringing public servants into the tax net.

The budget also promised to market price the output of energy and transport firms and repay cut state enterprise borrowings from the banking system.

The success of the budget hinges on pushing revenue to 17.2 percent of GDP from 15.6 percent.
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