Minister of Finance Ravi Karunanayake says the budget has made provision to convert the country into a manufacturing economy by converting the foreign debt into equity thereby reducing the debt burden of the people.
The Minister said that stake holders representing all sectors of the economy in the post budget discussions have hailed the budget as a positive step towards transforming the economy into manufacturing economy as the budget provides concessions by way of tax holidays, concessionary and interest free loans to investors and the local producers to commercialize the agricultural sector too.
“The biggest challenge the country faced was the debt trap which made the country unaffordable to bring any return on its development. As a result the Government’s revenue gradually deteriorated to an average of 11 % of the GDP by 2014. Now with increased efficiency and eradiation of corruption in the revenue collection, the state revenue has increased to 13.6 percent of the GDP thus making it possible to meet the recurrent expenses for the first time,” he said.
The Finance Minister said that during his recent visit to China Prime Minister Ranil Wickremesinghe held successful discussions with Chinese authorities to convert credits into equity.
Accordingly, the Hambanthota Port which failed to bring return on its huge investment will be converted in to a joint venture between the Sri Lanka Ports Authority and China with the equity of over one billion US dollars. This will enable the government to retire a sizeable portion of the loan obtained for the Hambanthota Port.
Similarly, the Mattala Airpot, Srilankan Airlines and Hambanthota Investment zone will have Public Private Partnership Investment (PPP) without selling off or privatizing any assets of the nation.
Previously the land at the Army Headquarters at Galle face and a land at Hambanthota had been given as a freehold to a foreign company to construct a Hotel complex. Though there was a 100 % levy on land purchased by foreigners these two hotels had been given exemptions.
In addition, at the Colombo Port city the then Government not only gave the foreign company the portion of reclaimed land as freehold. But no sooner the new Government came into office it took the initiative to retake the land given freehold to China bringing them under the Sri Lankan jurisdiction. (Colombo Gazette)