Oct Nov 04, 2008 (LBO) – Sri Lanka’s main opposition United National Party has revealed a sunshine ‘budget’ promising massive salary increases to the public sector and reductions in fuel prices, indicating an emerging political consensus on economic populism. UNP is also claiming to improve prices for commodity producers through trade agreements and extend GSP+ plus trade benefits from the European Union.
An estimated 3,000 million rupees to be spent on Mihin Air, a defunct state-owned budget airline, would be spent to upgrade villages.
Karunanayake says the expenses would be financed by reducing interest rates and inflation to single digits.
Value added taxes would be removed and replaced with a 10 to 11 percent consumption tax.
UNP says it would also be able to tap foreign funds at concessionary rates instead of high interest commercial loans.
UNP says the total cost of the benefits would be 261 billion rupees but total savings from interest rates and a flat consumption tax would be 283 billion rupees.
The UNP also says it will carry out the 17th amendment to the constitution relating to independent commissions and assure freedom of the media.