Budget 2022: Initial reaction from private sector mixed

By Charumini de Silva

Private sector’s initial reaction to the Government’s Budget 2022 presented yesterday was mixed; some were hopeful of the focus on exports, investments and entrepreneur-led policies, whilst others were unconvinced with the lack of a coherent policy framework.

Some of them opined that key foreign exchange generating sectors, such as tourism, apparel and agri-exports, are also expected to remain subdued at a time when the industries were expecting more reinforcement from the Government.

The mixed reactions were from business leaders who were available to comment at the time this edition went to print. The formal private sector lobby groups, such as the chambers of commerce and industry, are expected to issue statements from next week onwards after a proper review of the

 Budget 2022.

Some of those who spoke to FT said: “The Budget 2022 has not addressed the needs of the country’s struggling tourism sector, which is desperately in need of Government support to help them survive.” Pointing out that tourism was a low-hanging fruit that the Government could have leveraged to easily turn around the economy, the industry stakeholders said the Government has ignored the proposals submitted particularly on debt restructuring, which would have helped the majority of the industry.

However, they commended the Government for extending the moratorium, despite the tight fiscal space due to low foreign reserves.

The apparel industry stakeholders noted they were encouraged by the focus on developing an export-oriented economy and the identification of the sector as one of importance to the economy.

“Backward integration of the apparel industry is vital for the development of efficient supply chains. The expansion of this will be crucial for the import substitution that we are looking for,” they pointed out.

Apparel industry also said they were eagerly looking forward to the new Finance Act and how it would help develop and grow the sector.

Some of the industries said it was too early to comment, while others lamented their sectors were overlooked. Certain industries said they were awaiting more clarity on policies like the Monetary Act, which will be amended to consolidate the charges, which are currently being charged by the Board of Investment (BOI), Export Development Board (EDB) as well as the Special Goods and Services Tax (Special GST) which will be effective from January.

The private sector stakeholders lauded the efforts taken by the Government to encourage women-centric enterprises and incentives extended for start-ups with registration-free initiatives.

“Like every Budget before it, it all undoubtedly depends on the implementation,” they pointed out.