31.12.200802:52:00UTC+00Sri Lanka Announces US$141 Mln Stimulus Package

Wednesday, Sri Lanka's government unveiled a LKR16 billion or US$141 million economic stimulus package including fuel price cuts.

In a statement, the government said concessions have been offered to the sectors of commercial agriculture, industries, services and the consumers.

With the intervention of the Tea Board, the government will provide 50 kilogram bag of mixed fertilizer at the rate of 1,000 rupees a bag.

The government said it intends to cover the cost of this fertiliser subsidy after imposing 2% cess on export tea once the price of tea exceeds 300 rupees. The government also announced that it will cut off the loans given for the tea factory modernization for 2009. Further, the government decided to maintain the rubber price at a rate of 150 rupees.

For the benefit of the business sector, the government decided to reduce the VAT refunding period to maximum of six months. The government also announced the decision to slash state expenditure. Accordingly, allocations for ministries and state departments have been slashed by 5%, ministers by 10%, the President and Prime Minister by 15% and housing for MPs by 50%.

The Cabinet presided by President Mahinda Rajapaksa decided to reduce petrol prices by 2 rupees per litre and lowered diesel, kerosene and furnace oil prices by 10 rupees per litre. The government also announced that three wheelers will be provided with 75 litres of petrol per month at 20 rupees less then the current market price.

The price of domestic gas cylinder was also reduced with effect from midnight Tuesday. Laugfs Lanka Gas Ltd. will lower 276 rupees per gas cylinder and Shell Gas Lanka reduced by 166 rupees.

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