Finance Minister asks: Why not BMW-owning farmers?


by Sanath Nanayakkare

Sri Lanka’s farming and agriculture sector needs to be commercialized to a degree that local farmers will create substantial wealth for themselves to even become BMW-owners, Finance Minister Ravi Karunanayake said in Colombo Monday.

The minister said so during a well-attended public discussion held at the Colombo Hilton organized by the MP Foundation, titled, ‘Two Hours with the Finance Minister’.

"Farming and agriculture is over protected. The fertilizer subsidy has to be continued as it is ‘political dynamite’. In this backdrop, farming needs to be commercialized via innovative measures for farmers to create substantial wealth for themselves to even own BMWs.Why would it be impossible for farmers to own BMWs in a country where a farmer has been able to elevate himself to the presidency, the minister asked.

"The World Bank has pledged its support to the government with a lending model for ending poverty and promoting growth. The IMF has pledged support to the government to tackle issues of Balance of Payment. However, we need to keep in mind that they are not lending us for nothing. They want to see that we talk the talk and walk the walk. Nevertheless, we made it clear to them that any lending support has to come with no strings attached to public expenditure."

Commenting on revenue collection, Karunanayake mentioned with a sense of satisfaction that the government has been able to collect over four billion rupees in excise revenue in January.

Referring to the Cost of Living (COL) the minister said," As it is done in Dubai and Singapore, COL needs to be controlled through market competition. We’ve given a human touch to the budget. Public sector wage increase has boosted household income. COL relief measures together with public sector wage increase annually infuse Rs. 630 billion to the economy. It will drive increased consumer spending which in turn spurs business confidence."

The minister went on to comment on the tax structure too. "Today there are 37 taxes and levies. The government’s considered opinion is to bring it down to 15."

Karunanayake said the country’s export sector mainly consists of garments, ceramics, footwear, agriculture and services and the government would have to find ways to diversify exports into new areas.

Responding to a question as to why the government has been unable to ensure price and fare reductions in consumer goods and services as intended by the budget, Karunanayake said," Some of those issues can be dealt directly by the Consumer Protection Authority while others boil down to a demand for ethics in the society at large."

After all was said and done, the takeaway message from the two hours with the Finance Minister left some people wondering whether the government is doing enough about the macro-regime, such as, creating optimum conditions for investment, boosting efficiency of the capital market, driving forward the knowledge economy through fast-track skills training programmes etc.

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