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Biggest-ever privatization drive through Budget 2024

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Sri Lanka has embarked on its biggest-ever privatization drive through Budget 2024, infusing assets ranging from Rs. 500 billion to 1 trillion into the national economy, President Ranil Wickremesinghe said yesterday.

Addressing heads of media institutions and editors at the Presidential Secretariat, President Wickremesinghe said this process involves granting complete freehold rights to farmers and common citizens

who acquired land under the Land Development Act. Residents of Government apartments are also conferred with this right.

“This initiative will surpass the potential revenue from the sale of SriLankan Airlines and other such ventures. This marks a significant stride, constituting the most substantial privatization effort in Sri Lanka,” the President told the gathering.

Historically, land rights were granted to entities like the Shangri-la Hotel, neglecting the common populace. However, a transformative shift has occurred and land rights are now extended to ordinary citizens, rectifying past disparities. Initiatives like the Mahaweli were intended to distribute land to the people, yet zones C and H were overlooked. Now, all such land has been rightfully returned to the people.

To propel our nation forward, it is imperative to restrict Government expenditure. In this year’s budget, numerous decisions have been made to curtail such spending. Additionally, in adherence to the Central Bank’s regulations, the printing of money and acquiring loans from banks is now restricted. The scope for Government borrowing from external markets is also constrained, compounded by our existing substantial debt.

Our commitment to fostering a new economy is evident, with a focus on enhancing competitiveness and market expansion. Collaborations with the RCEP organization, India, Bangladesh and the European Union underscore our dedication to building a robust economy. To achieve competitiveness, support is provided to transform non-competitive businesses.

In the short term, we’ve initiated modernization programs in agriculture and fisheries to invigorate the economy. The modernization of agriculture holds the promise of revitalizing a substantial agricultural sector in our country.

Efforts have been initiated to augment tourism revenue and elevate the influx of tourists to 5 million. The Government has launched a Digital Economy program, emphasizing advancements in new technologies, including Artificial Intelligence. New legislation is underway to facilitate the establishment of both Government and private universities.

Provincial Councils have now been liberated from existing constraints, enabling them to support the export economy. The urgency to create new job opportunities and income streams by 2030 underscores the need for prompt action. Consequently, the blueprint for constructing the new economy is slated to commence in 2024, recognizing the time sensitivity of these transformative measures.

“We call for the support of all citizens in navigating the country away from bankruptcy. The country experienced a contraction of 7.3 percent in its economy last year. However, international financial institutions project a reversal in fortunes, forecasting a wealth growth of 1.8 percent in the coming year, with the possibility of an even higher increase.

Indicators suggest a level of recovery from the economic recession, a trend substantiated by current statistics. As of April 2022, the foreign reserves in our country stood at just US$ 24 million, a figure that the current government has successfully elevated to US$ 3.5 billion. A positive balance in the primary account, a critical factor in debt repayment discussions, is anticipated for the next year. Currently, aside from restrictions on vehicle imports, there are no other import constraints, and there is no foreign exchange limit. The 2023 agreement with the International Monetary Fund confirms the completion of domestic debt restructuring, with ongoing discussions focusing on further debt restructuring- all of which have seen successful outcomes thus far.

The projected state revenue for the next year stands at Rs. 4,127 billion, while the anticipated cost is Rs. 6,978 billion, resulting in a budget deficit at a modest 8 percent. Moving forward, Government expenditure will be sustained by Government revenues, adhering to borrowing limits stipulated by Parliamentary legislation and in accordance with International Monetary Fund (IMF) agreements. Consequently, future expenditures will be contingent on earning the necessary funds.

To sustain the momentum of the economic growth program, adherence to the agreements with the IMF is imperative. This is not an ordinary program; it was initiated in response to the economic downturn, and consequently, the Government is bound to operate within its framework.”

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