The Sri Lankan government has created space for municipal councils to raise funds by issuing municipal bonds, which are five times bigger than the Municipals’ Budget surplus, says Dr .P.B Jayasundara , Secretary to the Treasury.

He made these sentiments addressing a Post-Budget seminar organised by Ernst & Young. Dr.Jayasundara stressed that the government is fully committed in creating new investment opportunities in the municipal councils and will implement certain reforms to meet the development targets of these organizations.

“The government has also created the space for local banks to look out for international markets rather than competing for the same customers locally. Our banks should go to international markets and raise money and show their balance sheets to the world market. Today, Sri Lanka needs capital in every possible way and the private sector needs to participate in special poverty reduction initiatives in areas where they operate in.

The private sector has to raise investments; to do that, restrictions on capital formation have to move out. The country has now developed capacity for such borrowers to go to the international market and raise money for much-needed investments across the country. Today, what matters is the sustainability in capital formation and it’s imperative to deepen the debenture market through listing as a fund of capital formation,” said Dr.Jayasundara.

The government has committed 6 % of GDP as public investment in infrastructure development and there is a continuous effort to expand the infrastructure network across the country. People will see more value addition in express ways next year and the government will promote port based city industries in the near future. On the tax front, the Tax Appeal Commission should be strengthened and the tax system will not be compromised for short-term gains.

“We are almost on the border of stepping into a upper middle income country. When the country hits the $ 4,000 per capita income status by 2015 or 2016, Sri Lanka will reach the poverty free middle income status.

Today, Sri Lanka has also become a donor to extend grants for countries like Uganda and Maldives and is becoming a supplier to the World Food Programme as well,” Dr.Jayasundara added.