Minister of Finance, Central Bank officials, research specialists deliberate on 2019 budget benefits

Minister of Finance, Central Bank officials, research specialists deliberate on 2019 budget benefits

Written by Staff Writer

07 Mar, 2019 | 10:20 pm

Colombo (News 1st): An event was organized by the Partners of KPMG under the title ”Salient Features of the 2019 Budget”. Minister Mangala Samaraweera speaking at the event said that one of the serious problems that we have is that many deserving young people do not enter university due to the lack of space.

In fact, he noted that every year nearly 300,000 young people would sit for their advanced level examinations.  Finally, only 30,000 would find a place in the universities locally and that is why we want to extend a helping hand. We have introduced the “Mage Anagathaya” loan scheme where we will provide Rs. 1.1 million to any student who wants to continue their studies in private colleges or private campuses in Sri Lanka. There is also a grace period of 5 years and 15 years to pay the loan after they start working.

Nishan De Mel, Head of Research of Verite Research said that the second area where the budget attempts to solve this problem is through loans for entrepreneurship. We have had 3 negative shocks on our rural economy, (1) the end of the war and the reduction of fund transfers that are going into the rural areas through the military, (2) we have had the government increase taxes and suck out money from the economy into government coffers and that is excess consumption that came out of the system into government spending and (3) we have had floods and drought that significantly reduced agriculture output and harvest in the rural economy. So there were 3 distinctive events that sucked out the spending activities in the rural sector and in the economy in general. What this kind of loan scheme can do is to put back the oxygen of cash into the rural economy, get people spending and create a Keynesian effect if it is managed without too many fiscal consequences to the economy.

Dr Nandalal Weerasinghe, Deputy Governor of the Central Bank said that the Central Bank law that has already been announced has been drafted and it will be soon presented to the cabinet. The Central Bank law will be revised and incorporated to facilitate inflation targeting and to bring in macro measures into the law so that it will strengthen the independence of the Central Bank and the accountability. This will result in targets and objectives being much more focused.

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