Our Government has succeeded in restoring stable macro economic conditions during the last four years through progressive reduction of high budget deficits, from 10.5 per cent of Gross Domestic Product (GDP) in 1994 to 7.9 per cent in 1997 due to sound financial policies and improved governance. We are confident, we can maintain the current year deficit also below 8 per cent of GDP although this is higher than our original target of 6.5 per cent. We followed prudent monetary policy and a flexible exchange rate policy and succeeded in keeping interest rates and exchange rate competitive. If not for the efficient management of the economy and the high levels of financial discipline resulting in the reduction in budget deficits, inflation rate as well as interest rates would have exceeded 20 per cent and exchange rate would have depreciated drastically. It is therefore necessary to take concerted action to further consolidate the satisfactory trends, which have emerged during the last four years. In doing so, we will direct our policy emphasis to encourage the growth of national production and further employment creation as a matter of priority.

Employment Generation

Our Government accords highest priority to create employment opportunities and provide reasonable living conditions to our growing population. During the last 4 years, we have created over 700,000 jobs in both private and public sectors and through overseas employment and self employment programmes. A considerable level of investments was undertaken in the development of 4 new export zones and 28 regional industrial estates. Fiscal incentives have been offered to attract industries into these zones. In response to these incentives 250 new industrial establishments are under construction. Out of 1,206 projects approved by the BOI, 500 industrial ventures are expected to reach project implementation stage early next year. The employment potential of these new industries is in the range of 80,000 - 100,000. A number of large infrastructure projects that will come into effect next year particularly in the areas of highways, ports and telecommunication will create a construction boom providing employment for a vast number of people. It is expected that these sectors would create about 10,000 jobs.

We formulated several programmes of employment for unemployed graduates. The "Tharuna Aruna Programme" implemented with private sector assistance has proved very successful. Out of 5,000 applicants, already 1,600 have been placed on private sector employment. Some of them have graduated to managerial positions drawing monthly salaries over Rs. 10,000 This programme is expected to expand further next year, providing increased opportunities to unemployed graduates at private establishments. The Government will also propose to increase training in various fields through skills development programmes and establishment of an IT technology training centre next year with a view to creating further employment opportunities. A further 5,000 jobs will be created in this sector. On a conservative basis, 75,000 jobs are also expected through overseas employment. The Government will also absorb qualified youths into technical positions in various development agencies, which require a large number of educated youths. The Government will thus aim at creating 150,000 - 225,000 employment opportunities during the next 2 years in both private and public sector organisations. A Presidential Task Force will be set up to achieve this target through a co-ordinated approach.

Incentives for Regional Industrialisation

In 1998 Budget, the Government re-oriented the BOI incentive structure to encourage regional industrialisation. Accordingly, companies setting up expansion units or relocating to zones in difficult and most difficult areas were given tax holidays and other BOI incentives, provided such investments will be undertaken before the end of 1998. In view of the encouraging response and also in view of the fact that most of the industrial parks that are being set up will be available to investors for the setting up of their industries during the course of next year, I propose to extend this concession till December 31, 1999.

Fiscal Incentives for Advanced Technology

A fiscal incentive scheme was introduced in the 1996 budget to encourage investments in new industries as well as existing industries to acquire advanced technology to raise productivity and to improve competitiveness. In view of the progress achieved particularly in respect of employment generation of about 20,000, I extended this scheme in last year budget for a further period of 2 years. In order to provide benefits to small industries, I propose to do away with minimum investment requirements for the purpose of importing machinery and equipment on a duty free basis. However, income tax concessions will be available only if investment proposals are kept to the prevailing minimum investment requirement of Rs. 4 million.

Assistance for the Private Sector to engage in Training in Priority Sectors & Productivity Improvement in Local Industry

In the context of on going reforms in technical education and vocational training, it is necessary to encourage the private sector also to invest in training. The BOI already provides preferential tax rate of 15 per cent and duty free facilities to establish training facilities. In order to further stimulate the private sector investor engagement in the provision of training facilities in priority sectors such as garments, gem and jewellery, electronics, computer software, I now propose to amend BOI incentives to grant a 5 year tax holiday provided each training institute undertake training for a minimum of 300 persons. I also propose to provide financial assistance to expand and improve existing training programmes or to establish new training facilities. Therefore, I propose to allocate Rs. 50 million to the Tertiary and Vocational Education Commission, which will disburse funds based on, established criteria that are aimed at promoting transfer of technology, modernisation and employment promotion.

I also propose to set up a Skills Development Fund in order to support the employers to conduct job entry training, upgrading and retraining of their employees as well as to improve enterprise based training, with the objective of raising productivity in Sri Lankan industries. I propose to allocate an initial grant of Rs. 100 million for this purpose.

The Government has identified information technology as one of the major thrust areas with a view to encouraging the exploitation of IT for national development. Globalisation of economic and financial services and trade, together with the increasing use of electronic has already broken down traditional barriers and brought in new challenges. We have a talented and skilled human resource base. Their capabilities need to be directed to obtain the full benefit of the global demand for software development and IT services. In 1998, budget, a 5 year tax holiday and other BOI facilities were extended for the development of software for commercial purposes. The number of software development facilities approved by the BOI has increased to 34 of which 11 are already in operation and the balance is to come into effect next year.

However, there is a large potential for employment creation in this sector due to the high demand for software professionals. To ensure that human resources are developed and are freely available, I propose to grant further incentives in the area of training of software specialists, by exempting from income tax for a period of 5 years, the profits earned from the operations of software training institutes, which have a minimum investment of Rs. 15 million with the facilities to train a minimum of 300 persons per year. Equipment imported by such institutions would be made duty free. The Government also proposes to upgrade the existing network of technical and vocational training institutes and also to set up an Institute of Information Technology affiliated to the University of Moratuwa with the assistance of the Mahapola Fund.

Millennium Compliance - The Year 2000 Compatibility of Computer Based System

For many years, a wide variety of computer programmes that display, manipulate or store data have adopted the shorthand convention of using only the last two digits of the year in a six digit date field. As year changes from 1999 to 2000 the two digits devoting the year will change from "99" to "00" and will cause problems when doing any form of computation, comparisons or sequencing of data fields by giving unpredictable results. As most micro computer processor based plant, machinery, equipment, instruments and software marketed and consequently purchased upto around the mid l990s had a design limitations of having only 2 digits to represent a year, the continued use of them without remedial measures could cause difficulties and possible disruptions to activities of the organisations. Securing of the year 2000 compliance is therefore a national priority. The Government has already set up internal task forces to check on year 2000 compliance among public and private sector organisations. As an incentive to secure year 2000 compliance, I propose to allow 100 per cent write off of IT purchases till March 31 , 2000.

Construction Industry

The construction industry plays a vital role in national economic development. It accounts for 7 per cent of Gross Domestic Product and provides employment for a large number of people. In recent years, this sector has expanded due to an increase in the construction of buildings, roads and other infrastructure facilities as well as rehabilitation and maintenance of such facilities. As the local construction industry plays a vital role in infrastructure development programmes, I propose to allow duty free import of machinery and equipment for such activities. As foreign contractors enjoy tax concessions, I propose to reduce income tax on construction activities from 35 to 15 per cent, with effect from 01.04.1999.

The construction contractors are also required to furnish various securities such as bid bonds and performance bonds, under the conditions of contracts at different stages. Commercial banks generally insist on high collateral values in the issuance of such securities. The Ministry of Housing and Urban Development has proposed to set up a Construction Industry Guarantee Fund to overcome this problem. Therefore, I propose to contribute Rs. 100 million as seed capital for this Fund. A suitable mechanism to enable clients to accept guarantees from this Fund will be formulated. Local construction contractors will thus be able to participate in this lucrative industry, which was barred to them by the unduly stringent conditions mentioned above.

Formation of Farming Villages

With a view to expanding the agricultural production base, the Government has identified about 100,000 acres of cultivable lands in both the dry zone as well as in the wet zone and in the plantation sector. The Government proposes to establish farming villages in these areas providing basic infrastructure such as roads, electricity and water, and alienate these lands to the farming community to engage in commercial activities. Initial seed capital to such settlers will also be arranged through commercial banks by way of loans using alienated lands as collateral. Farmer companies will be promoted so that inputs and marketing could be organised by such farming communities themselves through their collective efforts. I propose to allocate Rs. 300 million for the development of basic infrastructure in the formation of these farming villages, which will provide meaningful livelihood for at least 35,000 farmer families.

Improvement of Basic Seed Production

The non-availability of quality seed in sufficient quantity is a major constraint in increasing agricultural productivity in the country. In order to address this problem the Government took several steps in the previous budget. Accordingly, the Department of Agriculture has already intensified the extension services to increase seed paddy production in major rice producing districts. In terms of this programme, the total acreage under certified seed paddy production has increased from 1,000 last year to 4,623 this year. Importation of seed and planting material was also made duty free. In order to further develop the production of quality seed in the country at commercial level, it is necessary to concentrate on the production of basic seeds at seed production centres of the Department of Agriculture. Therefore, I propose to strengthen the existing seed production centres at Mahailuppallama, Batalagoda, Ambalantota, Bata Ata and Nikaweratiya to increase basic seed production and promote farmer organisations, co-operatives and other private sector participants to increase certified seed production in the country. Agricultural extension services for the seed certification programme, fertiliser use and field level testing will further intensify to increase agricultural output. I propose to allocate Rs. 100 million for this programme.

Overseas Employment

Since 1994, the Government has introduced several measures to encourage overseas employment and welfare of those families. The Foreign Employment Bureau implemented a life and health insurance scheme, distribution of school material for children of migrant families, housing loan scheme at concessionary rate of interest and training programmes to develop skills. Pre-departure loans upto Rs. 50,000 is also arranged for those who are seeking overseas employment. The people who engaged in overseas employment have increased from 500,000 in 1994 to 700,000 in 1998. In order to encourage employment agencies to further promote overseas employment, I propose to give duty free vehicles for registered agencies maintaining good track records and achieving employment targets specified by the Employment Bureau.

I also propose to increase the tax exemption on recruitment fees paid by the Bureau from Rs. 2,000 to Rs. 3,000 per person. I also propose to expand the training opportunities provided by Employment Bureau to those seeking overseas employment. The Employment Bureau will also initiate a self-employment loan scheme at a concessionary rate of interest for those returning from overseas employment. I also propose to give a free grant of Rs. 5,000 for every Sri Lankan returning from overseas employment over a period of 1 year as an incentive payment. I therefore propose to allocate Rs. 350 million to the Employment Bureau to implement these proposals.

It had been estimated that urban and shanty settlement units in the country are approximately 150,000 of which 55,000 are in Colombo. These settlements are scattered on a land area of 210 hectares or 6 per cent of the total built-up area.

The Government proposes to launch an urban housing development programme for the benefit of encumbered households with the participation of such householders to develop designated slum and shanty areas by identifying lands where such settlements are in place. This process will have some innovative solutions such as voluntary relocation, programmes for income generation, bottom up planning system and implementation of holistic development with urban renewal and re-location. For the purpose of implementing this project, a joint venture company will be formed with an equity contribution by way of land by National Housing Development Authority and Urban Development Authority. The project which will aim at constructing 55,000 housing units in selected urban locations will be managed by the Ministry of Housing and Urban Development. Development under this programme will be eligible for concessions under the BOI and the relevant government agencies such as National Housing Development Authority, Urban Development Authority, will be directed to commit such land occupied by the people for this purpose. The additional infrastructure facilities required for urban renewal process and provision of better services to the low income settlers in selected locations will be the responsibility of the Government. I propose to allocate Rs. 100 million for this project to start in 1999.

Nutrition Intervention Programmes in Backward Areas

Sri Lanka's infant mortality rates of 16 per 1000 live births and birth weight of 24 per cent are in keeping with developed nations statistics and are indicative of satisfactory community health care. But in the face of these achievements at National level, we still have a high incidence of infant and pre-school malnutrition at local levels. This is largely due to improper and inadequate feeding practices and the lack of availability of low cost, high protein and complementary food. The Government is now in the process of making preparations to provide comprehensive nutrition education and nutrition supplementation to infants, pre-school and primary school children. Commencing from next year, I propose to implement a nutrition intervention programme to provide low cost, high protein complementary food and other nutrition supplements in targeted areas to infants, pre-school and primary school children. I also propose to increase the value of special food stamps, which are currently given to Samurdhi families to encourage mothers of such families to breast feed their infants. I propose to allocate Rs. 300 million for these programmes.

Allocation of Funds for a Conference Hall at the University of Peradeniya

One of the most urgently felt needs of the University of Peradeniya is for a well equipped conference hall as envisaged in the original plans in the 1950s. Provisions made in the original plans for such a hall were never implemented. A project including preliminary plans prepared for such a project with an estimated cost of Rs. 100 million has been submitted to the Government and I propose to make an allocation of Rs. 50 million in 1999 Budget to proceed with this project.

Deepening of Debt Market

In the last budget, I offered incentives to encourage companies to issue debt instruments to raise funds provided they seek listing for debt instruments in the Colombo Stock Exchange. These incentives which included the exemption from income tax, capital gains or profit on the sale of debentures, bonds and other instruments, coupled with the low interest rates have helped to boost listing of debt instruments. The development of the secondary market for debt is also important to give both listed companies and investors sufficient manoeuvrability to hedge there positions and encourage market development. Therefore, I propose to remove withholding tax of 10 per cent levied on interest paid on listed debentures and debt securities. Stamp duty on the issue of listed debt instruments such as debentures and promissory notes and stamp duty on re-purchasing agreements relating to Treasury Bills will also be removed. I also propose to remove capital gains tax on share warrants and derivative instruments. The capital gains tax in respect of shares and debentures has already been removed.

Development of Capital Market

In spite of the technological improvements in trading system in the Colombo Stock Exchange (CSE), its listing and investor base remains narrow due to insufficient participation by ordinary people, local business community and institutional investors. Therefore, I granted a tax bonus to encourage listing in the Colombo Stock Exchange. I also granted a waiver of the tax on capital gains of unquoted companies, provided they seek a listing in the CSE on or before March 31, 1999. I propose to extend this concession till March 31, 2000. I also encouraged long term funds such as EPF, ETF, insurance and NSB to provide equity capital to companies, which are already listed, or seeking listing. Accordingly, EPF has invested Rs. 332 million during this year while ETF has invested Rs. 2,671 million in equity. Insurance Corporation has also invested Rs. 2,547 million. With our continued effort to reduce budget deficit I expect that these institutions will increase their investments in quoted companies during 1999 by considerable margins. In terms of last year's budget proposals, the Government also contributed to the establishment of a Settlement Guarantee Fund and Compensation Fund this year, to provide investor confidence in stock trading to facilitate market participation.

The retirement benefits received by employees through their accumulated savings in Provident Funds are taxed at concessionary rates. On the representations made by the Ministry of Labour, the Government increased this concession in 1997 by widening the exemption limit from Rs. 200,000 to Rs. 400,000 and increasing the slabs from Rs. 50,000 to Rs. 100,000. In respect of retiring gratuity, the ceiling on which concessionary rates apply was also increased substantially. I propose to provide further relief to wage earners whose lifetime savings are made during their period of employment, as follows:

Concessionary Duty on Vehicles for Public Servants

Public officers have made representations to the Government requesting duty concessions to import vehicles as prevailing duties on the import of motor vehicles are prohibitive in terms of their salaries. I therefore, propose to allow public officers to import motor vehicles subject to a concessionary rate of 25 per cent for petrol vehicles and 40 per cent for diesel vehicles. This concession is subject to the limits in cylinder capacity of 1,500 cc in petrol vehicles and of 2,000 cc in diesel vehicles.

Excise Tax on Liquor and Cigarettes

I propose to increase the ad-valorem tax on all varieties of liquor under excise (Special Provisions) Act by about 10 per cent with immediate effect. I expect additional revenue of Rs. 600 million from this measure. I also propose to specify the excise duty on malt liquor based on alcohol content. The revised duty structure will yield additional revenue of Rs. 100 million. Prices of all varieties of cigarettes will also be increased by 50 cts. per cigarette through the revision of excise tax on cigarettes to generate further Rs. 1,100 million.

National Security Levy

Defence expenditure in 1998 is expected to increase to Rs. 56 billion and remain high at Rs. 47 billion in 1999. Therefore, I propose to increase the National Security Levy of 4.5 per cent to 5.5 per cent with immediate effect. However, National Security Levy on machinery and equipment that was reduced from 4.5 per cent to 0.5 per cent will not be changed, so that the proposed change will not affect investment cost. The National Security Levy Act will be amended accordingly. This will increase Government revenue by Rs. 3,200 million in 1999.

Administrative Fees and Charges

In the context of high administrative and operational costs, the revenue raised by government departments and agencies in providing various services is inadequate to maintain these services with quality improvements. Therefore, all charges on government publications, survey fees, registration fees, etc. and other charges will be increased by approximately 20 per cent with effect from January 1999. This is expected to yield additional revenue of Rs. 300 million.

Postal Rates

In terms of the prevailing rate structure, the Postal Department is projected to incur a loss of Rs. 547 million in 1999 due to 30 per cent increase in its operational expenditure. In order to minimise this loss I propose to increase the postal charge on the delivery of an ordinary letter from Rs. 2.50 to Rs. 3.50. The corresponding, adjustment will also be made in respect of post cards, registered letters, stamp covers and telegrams. The expected revenue from these charges is around Rs. 350 million

Railway Fares

The cost of running of the Department of Railways has increased rapidly from Rs. 1,675 million in 1994 to estimated Rs. 2,340 million in 1999. As against this trend the estimated revenue of the Department has increased from Rs. 916 million to Rs. 1,300 million leaving the operational loss to increase from Rs. 779 million to Rs. 1,040 million. I therefore propose to increase the railway fares by 25 per cent with effect from December, 1998. This will generate additional revenue of Rs. 300 million in 1999.

Levy Under Finance Act

The government will levy Rs. 750 million Authority under the Finance Act No. 38 of 1971.

The Government undertook a major reform in our tariff system by simplifying the rate structure within three bands of 10, 20 and 35 per cent in 1995. Since then, the Government has also extended tariff concession for raw material, machinery and equipment under various development schemes. The Government also appointed a Trade and Tariff Commission to come up with recommendations to further simplify our tariff system. The Presidential Trade and Tariff Commission has recommended to reduce the prevailing tariff and to move towards a two band tariff structure in two stages. Accordingly, the Government proposes to adopt a two band tariff structure in year 2000. Keeping to the broad guidelines recommended by the Commission and having regard to government revenue considerations as well as local industrial needs, the Government now proposes to replace current standard duty rates of 10, 20 and 35 per cent with 5, 10 and 30 per cent. Accordingly, all industrial raw material and machinery not manufactured in Sri Lanka will have a duty rate of 5 per cent. Duty concessions extended in respect of transport, communication and medical equipment will be classified under zero duty to simplify the procedure in respect of the importation of such goods and assist the continued expansion in industries using such inputs. As a further boost to Sri Lankan sports which have now reached international standards, import duty on sports equipment will also be made duty free. The reduction in customs duties on raw material and machinery will help to reduce the cost of production and further improve competitiveness of Sri Lanka's industries.

Customs duty on agricultural products will be maintained at the prevailing rate of 35 per cent to allow domestic agricultural sector time to adjust itself to a lower tariff regime over the medium term, as this sector was opened up to liberal trade, only very recently. However, zero duty will be maintained for agricultural seeds and planting material as a further support to local agricultural production. The Tariff Commission has recommended a limited number of items at 25 per cent but considering the impact on cost of living, I propose to maintain the current duty of 20 per cent for such items as an exception. These industries will in addition, benefit from the reduction in import duty on raw material.

The prevailing duty of 50 - 100 per cent on motor cars and jeeps will be unified at 30 per cent but in order to safeguard the government revenue targets, all vehicles will be subject to an additional excise duty of 10 per cent. The customs duty on crude oil and petroleum products will be classified under 30 per cent band. The net revenue from the changes in customs duty and excise taxes will be Rs. 1,200 million.

Although international prices of crude oil and petroleum products have declined in recent months, the Government is not yet in a position to reduce domestic prices as the Petroleum Corporation has to recover massive loss of about Rs. 4,000 million incurred in 1996 due exceptionally high international prices of around US$ 27/barrel. In addition to this loss, the Government also granted a waiver on import duty and excise taxes. Therefore, the Government was able to stabilise domestic prices. In this background, it is desirable to maintain prevailing prices, which will enable the Petroleum Corporation to operate without incurring operational losses next year.

The concessions in respect of passenger baggage allowance will also be restricted to curtail smuggling and leakages. In lieu of this allowance, all Sri Lankans returning from overseas employment will be given a grant of Rs. 5,000 through Foreign Employment Bureau. The benefits from this allowance went largely to middleman who purchased duty free allowance for approximately Rs. 3,500 from the Middle-East returnees. On the other hand, the sale of these goods in the market impacted adversely on local production and employment generation. The Middle East returnees will now receive a direct grant of Rs. 5,000 from the Government and will be benefited without the harassment from middleman.

Review of Tax Laws

There is a long-felt need to review our income tax laws with a view to improving tax administration as well as simplifying taxation. A large number of amending acts has also been enacted in recent years to give effect to various budget proposals. Thus, tax law has become very complicated, causing uncertainty among the business community and weakening tax compliance. Therefore, I propose to appoint a Committee of Experts to review our tax laws and make recommendations to simplify and codify the Inland Revenue Acts.

Customs Administration

The Government is committed to reform the prevailing systems and procedures in respect of customs administration in order to facilitate international trade and commerce, to meet the challenges of the next millennium. In the background of economic liberalisation, the expansion of BOI facilities, the implementation of several trade facilitation schemes and computerisation of customs administration, the prevailing institutional arrangements and regulatory framework require substantial changes. The Presidential Trade and Tariff Commission has also recommended a complete review of Customs Ordinance and systems and procedures to improve customs administration. Therefore, I propose to appoint a Committee of Experts from both public and private sectors, to undertake this study.

I also propose to extend the servicing hours of Sri Lanka Customs and Ports Authority without any additional cost to exporters in view of the increased demand for customs clearance facilities for export and import cargo. This will further facilitate our exports.

Expenditure Control and Monitoring

During the last four years, progress has been made in the computerisation of Government accounting system, with a view to improving the quality and timeliness of the data available to the Treasury, to improve government expenditure management. The Government cash management has also been improved to minimise idle balances and the use of unspent provisions for unproductive purposes. Steps have also been taken to strengthen monitoring of public expenditures in terms of their end use and the improvement of financial discipline. While the Government will further intensify these measures to improve productive use of government resources, it is necessary to economise public expenditures in order to keep the burden on government activities (to the general public) at a reasonable level. Therefore, I propose a 2 per cent cut on recurrent expenditure other than salaries, pensions and interest payments on public debt. This together with other expenditure control and management practices, I expect to generate savings of Rs. 1,300 million. Although I do not propose an explicit cut, I also count on a 3 per cent under expenditure from capital expenditure programmes. The expected savings accordingly are estimated at Rs. 2,595 million. In actual practice the under expenditure is around 10 per cent.

Let me now summarise the budgetary impact of my revenue and expenditure proposals. The revenue proposals would generate additional revenue of Rs. 7,900 million while expenditure proposals would result in an additional expenditure of Rs. 1,450 million. The anticipated expenditure savings are Rs. 3,895 million. The final out-turn in accounting format therefore will be as follows:

I propose to finance this deficit by gross foreign borrowings of Rs. 36,853 million and domestic borrowing of Rs. 60,174 million. Reformulated in the economic format to provide a meaningful economic interpretation, the final budget outcome will result in an overall deficit (excluding grants and divestiture proceeds) of Rs. 68.9 billion or 6.0 per cent of GDP as shown below:

Table IV
Summary

(Details may not add to totals due to rounding).

This level of budget deficit will further improve our economic fundamentals and sustain the present growth momentum into the next year with stability in prices. This level of deficit should succeed in reducing interest rates normally but in the present volatile context, would at least stabilise them at prevailing rates. We anticipate therefore, sustaining a growth rate of 5 per cent and containing the rate of inflation at around 8 per cent in 1999.

This in itself, if I may say so, is an achievement of remarkable proportions, in a context where many Asian and other countries are experiencing a vast array of problems in their economies.

Conclusion

Let me now wind up my speech. In the midst of several difficulties, we have resolutely followed correct policies towards stabilising the economy and carrying out far reaching reforms to fulfil the aspiration of our people. We have offered relief to several sections of the people, in the midst of financial difficulties. During the last four years, we have managed to provide welfare assistance to the poor, subsidise small farmer agriculture, raise salaries of public servants, teachers, our soldiers and pensioners, give tax relief to small and middle income tax payers and the working class and offer a wide range of fiscal and financial incentives to increase investments and employment generation. All this has resulted in a significant expansion of the national production base and national production. We must not forget that all this has been achieved whilst the Government and the nation are engaged in a terribly destructive and costly war. We are encouraged by our performance and we are confident that our economy will move forward on the bold policy initiatives that we have adopted. This budget re-affirms our earnest attempt to maintain stable conditions in our economy and carry out necessary reforms needed to make our economy strong. Notwithstanding the set-backs, we have stood by our objective of managing the economy efficiently. We have fashioned the budget and our economic policy with a clear economic vision to bring inflation under control and generate employment opportunities to our people.

Before I conclude, let me thank you Mr. Speaker and all members giving me a patient hearing. Her Excellency the President and I also thank all trade chambers, associations, professionals and all others who sent valuable suggestions in the preparation of this budget. We also wish to thank all the officials in the Ministry of Finance and Planning, the Central Bank of Sri Lanka, the Department of Inland Revenue, the Customs and the Excise and other agencies who assisted us in the preparation of this budget. We also thank the Secretary General of Parliament and his staff for their co-operation.