ECONOMYNEXT – Sri Lanka’s president has said he would address concerns of small and medium-scale industrialists in the upcoming budget, aiming to strengthen Sri Lanka’s export-oriented manufacturing economy.
“In the upcoming budget, we aim to introduce measures that provide bank loan concessions to support small and medium-scale industries,” Ranil Wickremesinghe said in his address at the National Industry Excellence Awards 2023, which took place yesterday (1) at the Nelum Pokuna Theater in Colombo.
Wickremesinghe added that a substantial portion of the budget will also be allocated to debt repayment and interest.
“Failure to meet these obligations could push us back into the old, precarious situation. Therefore, safeguarding our currency and fulfilling our loan obligations is of paramount importance,” Wickremesinghe was quoted as saying by his media office.
“In the past, when there was a budget shortfall, the solution was to instruct the central bank to print more money. This approach is no longer legally permissible and obtaining loans from banks has also become a challenge.
“To ensure our financial stability in the coming year, we must significantly boost our income. We have set specific revenue targets that we must work diligently to achieve.”
Wickremesinghe said it was necessary to gain the trust of private and multilateral creditors and “reassure them of our commitment to loan repayment. This commitment must be ingrained in our actions.”
“We had to make the difficult decision to raise the VAT to 18 percent yesterday (31). Such decisions are never easy for any government. However, failing to take these measures would cast a shadow on everyone’s future.”
“Through this decision, we can generate much-needed revenue to support small and medium-scale industries by repaying loans to banks. Without this step, these industries would face collapse, which puts industrialists in a challenging position.”
Wickremesinghe recalled the challenges faced last year. “At that time, there were numerous uncertainties about the sustainability of our industries. The absence of electricity and the difficulty in obtaining bank loans had led to the closure of thousands of businesses.”
“It’s remarkable to see a substantial number of individuals reinvigorating their industries and achieving success. Small and medium-scale industries have made a comeback in a relatively short period.
“Some issues remain unresolved, particularly concerning bank loans and market access. Our foremost priority is to address these concerns.”
At the start of 2023, the country’s economic growth rate was a negative 0.7%. “Today, it has improved to 0.5%, with further progress expected next year. This leaves us with a fundamental choice of whether to advance or regress.” (Colombo/Nov 2/2023)