Nov 23, 2015 (LBO) - The 2016 budget can be termed as a reformist agenda, that looks to address short-term risks to the economy while setting up Sri Lanka for the long run, CT CLSA Securities said in a report on the budget.
"Being used to budget speeches that were extremely populist, or included implausible or regressive proposals, the proposals presented on 20 November 2015, though falling short of being ‘revolutionary’ as promised in the lead up, look to adequately address the short term risks in the economy, whilst setting Sri Lanka up for the long run," the report said.
The proposals look to instill confidence amongst the investment community, and overall, the proposals appear to have taken note of comments made by a range of stakeholders, whilst comprising a more medium to long term planning perspective, CT CLSA Securities said.
"Whilst state intervention is likely to remain, or return, in some industries, there seems to be better distinction being made between essential and non-essential involvement."
The GoSL forecasts the fiscal deficit for 2016E to decline to 5.9 percent of GDP (740 billion rupees), against a deficit of 6.0 percent (675 billion rupeesn) targeted for 2015E (surpassing previous target of 4.4 percent, or 499 billion rupees)
Total revenue and grants is to rise at a staggering +39 percent YoY to 2,047 billion rupees in 2016E. GoSL estimates total expenditure to increase +29 percent YoY to 2,787 billion rupees in 2016E, with Public Investment to rise 68 percent YoY to 868 billion rupees.
CT CLSA said it should be noted that the proposals laid out in the budget are not officially finalized by the GoSL, with information also limited in some instances, until the release of gazettes, and thereby the details on some of the proposals could be altered in the weeks ahead.
The detailed report is below:
CT-CLSA-Sri-Lanka-National-Budget-2016-22-November-2015
The approach to the issue of taxation is far from the statement made b the prime minister economic programme, and is absolutely shameful to apply the indirect taxes , which affects mostly the bottom end of the population , about 70%, and hardly a system of taxation to the upper 10%. Even the permission for the importation of tea for blending could end up in a mess ,for our own CEYLON brand that was inherited from the day tea was grown and marketed. Again politics is interfering with the discipline that withstood the many crisis in the trade.