The government will continue to support the retail sector of the country to make Sri Lanka a hub for the retail trade in South Asia, Finance and Mass Media Minister Mangala Samarawera said at the ‘Retailers Forum 2018’ in Colombo on Thursday. Recognising the role played by the retail sector of the country the minister went on to say that the proposals submitted by the retailers will be taken up at the forthcoming budget.
‘The retail sector plays an invaluable role in terms of its contribution to the economy. It is a major contributor to the GDP and it is a leading employer to the workforce of the country,” Samaraweera said. The retail sector comprises over 3,000 organised retailers and a large number in the informal sector contributing almost one third of the country’s GDP. The retail forum held for the second consecutive year focused on the need for a national policy for the retail sector which requires upgrading to meet the needs of the sophisticated shopper.
Prime Minister Ranil Wickremesinghe pledged to formulate a national policy for the sector along with steps taken to improve the country’s ease of doing business ranking.
Speaking further Minister Samaraweera said a key expectation of the last budget was to create more jobs for youth in the North and the East and added that he was happy to note there has been commendable progress made in this regard.
“The Enterprise Sri Lanka’ program has already made an impact in the lives of rural masses with loans granted to aspiring entrepreneurs exceeding Rs 53 billion in the past five months. More emphasis will be laid on the Enterprise Sri Lanka and Gamperalia programs to reawaken the rural economy,” the minister said.
Through the Enterprise Sri Lanka program which provides loans at concessionary rates to small and medium sector entrepreneurs in the agriculture, fisheries, IT, export manufacturing and tourism industries, the government aims to achieve its medium-term targets such as per capita income of USD 5,000, one million new jobs and doubling exports. The minister said another Rs. 20 billion will be pumped in to the ‘Gamperaliya’ village reawakening program to commission 45,000 new projects across the country.
“The droughts had drastic effects on the agriculture sector in 2016. With rains improving this year there will be greater momentum for this sector which is the life blood of a large portion of the rural population. The loan scheme will help those in the agriculture sector to resume their livelihood,” the minister said.
Rebuffing media reports that the government is trying to follow the controlled economic policy of the past, the minister said the government is committed to further liberalisation of the economy.
‘Sri Lanka’s potential is bright as ever despite dark clouds gathering in the horizon. The future holds tremendous potential with growth moving to this part of the world,” Samaraweera said.
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Govt will not renege on promises - Mangala
By Lalin Fernandopulle
Finance Minister Mangala Samaraweera said the government will never renege on its promises but would rather deliver better welfare facilities to the masses through transparent policies despite the current local and global challenges to the economy.
Speaking to the media on the composition of the fuel pricing formula which the country has been clamouring for since the pricing system was introduced in July this year the minister said the government will never get back to the ‘closed door’ economic policy of the past but would rather strengthen the open economic policy that was introduced in 1978.
“There has been news circulating that this government plans to put a halt to imports of essential commodities which is totally false. We have not stopped imports of any item to the country but only have imposed temporary measures to curtail imports of vehicles to prevent the fast movement of foreign exchange out of the country,” the minister said.
Refuting claims that this government has not granted the benefit of fuel price reductions in the global market to consumers the minster said unlike the past regime the current government since 2015 has granted benefits when ever global oil prices came down.
Further making a comparison with peer countries the minister said the tax on fuel in Sri Lanka is low compared to India and many other countries in the region except Singapore which has a 12 percent tax on diesel.
Tax on petrol in India is 43 percent or Rs. 82.14 per litre, 33 percent or Rs. 57.52 per litre of diesel, Pakistan 38 percent or Rs. 29.33 per litre of petrol and a tax of 58 percent or Rs. 49.68 on a litre of diesel and in the UK 61 percent tax or Rs. 178.70 on petrol and 60 percent tax or Rs. 180.26 per litre of diesel whereas in Sri Lanka the tax on petrol is 34 percent or Rs 53.68 a litre and 19 percent or Rs. 25.48 a litre of diesel.
Responding to queries as to why the country had too many taxes the minister said all countries even Saudi Arabia imposed taxes on fuel which is essential to provide welfare facilities to the people.
When asked whether taxes on fuel would fluctuate Deputy Treasury Secretary S.R. Attygalle said all depends on the final price of fuel.
“If there is a major volatility in the prices the government will have to adjust prices by a duty waver”, Attygale said.
The price of crude oil dropped to $ 81 per barrel in the global market mid last week. However, with global oil prices reaching almost $ 86 a barrel triggered by renewed tension in the Middle East world commodity prices according to experts are expected to further rise making imports costly to countries.
Global oil prices are expected to average at $ 70 a barrel in 2018 from $ 53 a barrel last year due to strong demand from consumers and supply cuts by producers.
When asked how concerned this government is to its people who are already burdened with the high cost of living, the minister responded saying the benefits of global oil price reduction will be passed on to users unlike in the former regime which failed to do so.
In 2015 the price of a litre of 92-octane petrol was reduced from Rs. 150 to Rs. 117 while the price of 95-octane petrol was slashed from Rs.158 to Rs.128.
Since the pricing formula for fuel came into effect on July 10, up to September 10 the price of Octane 92 Petrol increased by Rs 12, Octane 95 Petrol by Rs 11, a litre of Super Diesel by Rs 13 and Auto Diesel by Rs 14.
Responding to a query whether fuel prices would be slashed due to the reduction in vehicle imports the finance minister said oil prices will depend on supply and demand.
However, a Treasury official said prices would get adjusted when demand for fuel drops.
Motor car registrations in September dropped to 4,990 units from 7,003 units in August according to a monthly vehicle registration tracker compiled by J B Securities.
The motor car registrations have been affected due to the demand for the popular middle-income class compact car Suzuki Wagon R hybrid with a 600 CC engine. However, Wagon R registrations too took a plunge by 31 percent from August.
The government was complelled to impose import restrictions to curb the outflow of foreign currency. The rupee weakened 11.3 percent so far this year.
The fuel pricing formula comprises four components namely landing cost, processing cost, administrative cost and taxation. Accordingly the Maximum Retail Price of fuel is established by adding four components V1+V2+V3+V4.