Sri Lanka to lean on banks to lend, cut taxes: official

July 30, 2010 (LBO) - The Sri Lankan government intends to reduce taxes further and put pressure on commercial banks to lend more to the private sector, Sarath Amunugama, Deputy Minister of Finance and Planning, said. With the island's agriculture and services sectors expanding very fast, there is a need to pay much more attention to the export manufacturing sector which has suffered from global recession.

"In the forthcoming years we will be spending more time and giving more concessions to the manufacturing sector," he told the annual general meeting of the Exporters’ Association of Sri Lanka.

The government was already spending heavily on modernising infrastructure and subsidising the cost of power.

"We have targeted a very rapid growth in infrastructure. At no period in the past has there been such a great effort to invest in infrastructure which is a requirement for rapid growth in exports," Amunugama said.

Five ports were being built or modernised, many road projects were underway, and the government is investing heavily in new power plants.

"During the last five years there have been no power cuts. We can now say to every investor that there will never, ever be a power cut in future.