Nov 17, Colombo: Prime Minister and Finance Minister Mahinda Rajapaksa presenting the second reading of the 2021 budget in Parliament this afternoon (17) said it is a development budget presented to elevate an economy that has been shattered.
The budget will cover all sectors under a macroeconomic vision aimed at fulfilling the President Gotabaya Rajapaksa’s “Vistas of Prosperity and Splendor”, the Prime Minister said emphasizing that the public sector should provide the necessary support in this regard.
“This is a budget that will open up numerous special investment opportunities to our business community for production of local goods and services under the competitive setting of the global economy. Producers of all scales should strive during the next 3 years to allow local economy to competitively enter to the global economy.”
For the benefit of the country, the Prime Minister requested from all entrepreneurs to utilize the funds hidden locally or internationally in order to evade laws relating to taxes and foreign exchange promising to make legal provisions to provide a tax pardon to entrepreneurs thus utilizing funds for any investment facilitated by this budget under the payment of taxes amounting to 1 percent.
The estimated Government Revenue for 2021 is Rs. 1,961 billion. The total Government expenditure is Rs. 3,525 billion and as such the difference between the revenue and the expenditure is Rs. 1,564 billion. It is planned to maintain the budget gap at 9 percent of the GDP since the private investments which amounted to 32.3 percent of the GDP in 2014 has decreased up to 27.6 percent in 2019 and since it is required to provide a robust start by the government to revive the economic growth which had stagnated recently.
The Premier expects to manage this budget gap, due to enhanced opportunities to reissue local and international currency denominated debt at maturity.
While the expected economic growth rate for 2021 is 5.5 percent, the Prime Minister emphasized the medium term vision to reduce the budget gap through increasing the economic growth up to 6 percent and increasing the government revenue from its current level of 9.7 percent to 14.1 percent.
The government targets to reduce the budget deficit to 4 percent by 2025 due to growth in tax revenue through the expansion of the economy and the trust placed on the management of public expenditure and public enterprises.
The Prime Minister requested all lawmakers to give their blessing to the development budget aimed at economic revival and poverty reduction.
Read full Budget Speech