At last, small biz gets the attention it needs! Most people think that Capitalism means Big Biz. But that is not, at all, how today’s globalized economy works. The market economy thrives only when the whole society is imbued with the spirit and dynamic of entrepreneurship, and the small person is availed the opportunities and facilities to do business as much as the big corporates.
Last week’s reduction in import duty for certain small vehicle types and the announcement of a string of incentive packages and tariff concessions by our new Finance Minister, Mangala Samaraweera, does just that.
The measures announced last week: the 10 percent Telecommunication Levy on Internet data will be completely removed from September 1; the excise duty on single cabs and mini trucks has been brought down from Rs. 1 million to Rs. 700,000; ad-valorem excise duty rate of 90 percent has been completely removed for motorcycles less than 150 cc. ; and, eight loan schemes with concessionary interest rates for several selected sectors based on a budgetary proposal for the year 2017.
The business financing schemes are “Ran Aswenna” and “Govi Navoda” loan schemes for the agricultural sector, “Riya Shakthi” loan scheme for school transport services, “Rivi Bala Savi” loan scheme for solar power production, “Diri Saviya” loan scheme for poultry farming, “Jaya Isura” loan scheme for the general Small and Medium Enterprise (SME) sector, “Madya Aruna” loan scheme for journalists and “Sonduru Piyasa” housing loan scheme for low income families.
The Government has reportedly allocated Rs 4.4 billion this year for interest subsidies of these loan schemes. It is estimated that the resulting SME business expansion could provide about 50,000 new employment opportunities.
Mr. Samaraweera, taking up his new and challenging portfolio with aplomb, argued ably at his media briefing last week that the Government wanted to nurture “a new breed of entrepreneurs” at the grassroots to boost “local production”. The new credit facilities and import duty concessions will, he pointed out, provide greater investment capacity for small entrepreneurs as well as afford them better modern transport capability for their ventures. The internet data levy concession will be a boon to small entrepreneurs in the Information Technology sector which is one of the fastest growing sectors globally.
Mr. Samaraweera is firmly in line with the general economic policy outlook of the National Unity Government and last week’s measures are yet another shot in the arm, specifically for the Small and Medium Entrepreneur. The Sri Lankan economy is not a one-street economy dependent on a single powerful production sector or, just two or three key sectors.
While the country broke free from colonial rule with the baggage of a plantation crop export economy, successive governments have endeavoured to deepen the national economy’s capacities with diversification into the manufacturing and services sectors.
No doubt, the past decade of the Rajapaksa rule saw wild adventures in plunder-friendly infrastructure development with virtually no systemic planning that balanced such development with the carefully targeted expansion in manufacturing and services. The exception was the Rajapaksa cronies’ investment binges in unhinged tourism and property development in total disregard for local socio-environments and with much regard for kickbacks and other personal goodies.
This aberration in economic strategy now safely in the past, the country must re-focus on ensuring a holistic economic development. Such development must ensure the diversification of opportunities via carefully planned, diversified, growth paths in targeted sectors. Such planned diversification ensures a balanced national economy, able to withstand the rigours of the highly competitive as well as politically and climatically fragile global economy.
In short, if our colonially dependent plantation economy then did not provide us with a ‘Plan B’ in case of global disruptions, today, the enlightened government must ensure that we have a ‘Plan B’ and ‘C’ and ‘D’ to fall back on in these turbulent times.
The new economic package for Small Biz announced last week indicates an improved crafting of the national economy. It is to be hoped that the Government can sustain such careful crafting of the economy and not be distracted by any adventures into un-planned ‘development’ inspired solely by vested interests or narrow political constituency considerations.
The citizenry has had enough of nepotism and plunder done in the name of ‘development’ and needs the kind of concrete example of planned development as that announced by our Finance Minister last week. It is only when the Small Person is afforded opportunities for good business that the general populace is convinced that ‘development’ under capitalism is one that benefits all citizens.