In the new Budget 2006, President Rajapaksa announced a series of measures to benefit the masses burdened by the high cost of living and to spur business and investment. It also retained some of the beneficial proposals in the budget presented last month by the former finance minister.

Outlining the aims of Budget 2006, President Rajapaksa, the Finance Minister, said the Government will implement policies towards building a 'New Sri Lanka' with rapid socio-economic development.

"This manifesto now forms the basis for the next six year development framework in our country and my Government and I collectively and singularly remain committed towards a well sequenced implementation of this development programme," the President told the House.

"The economic vision articulated in my manifesto is a further consolidation of the economic policy framework adopted by the UPFA Government last year in which both the private sector and the public sector co-exist in a complementary manner in a market friendly environment to promote a national economy," he added.

"We must accept that many countries are reshaping their economic policies to empower themselves through home grown policies with considerable local ownership and accountability," he said.

He observed that within the first six months of next year a national development strategy will be formulated for agriculture, livestock, fisheries, SMEs, plantation, industries, tourism, banking, infrastructure, rural development, education, health, skills development, poverty alleviation, governance and foreign investment. This national development strategy will reflect short, medium and long-term considerations.

The Mahinda Chinthana is to re-engineer our economy over the next six years to create economic opportunities for the people to move out of poverty, he added. In keeping with this strategy, the Budget contains many proposals for the development of these spheres.

Poverty alleviation has been given a key place in the Budget, with the President proposing to increase Samurdhi allowances by 50 per cent. It is also envisaged to commence islandwide community work programmes and livelihood support activities to provide opportunities for Samurdhi beneficiaries to earn an extra income up to Rs.5,000.

For the first time in a Budget, the highest level of capital expenditure of Rs.3,000 million will be allocated in 2006 to transform Samurdhi into a mega rural development programme.

Agriculture has been considered as a priority area in the Budget. The provision of fertilise at subsidised rates, tax exemptions, the implementation of a special SME credit scheme for 500 SMEs in the Mahaweli area to promote agro processing industries, a methodical programme to purchase paddy at guaranteed prices are among the proposals.

The Budget has also granted a salary hike and many other facilities including car and housing loans to public servants. They will also be allowed to import motor vehicles at concessionary duty. Pensioners too will benefit.

Honest tax payers will be rewarded by the Budget. They too will be able to import a vehicle on concessionary duty terms, among other benefits.

For the first time, journalists are receiving a number of benefits from a budget including duty free computers, motorcycles and media equipment.

The SME and industrial sector will also receive a host of incentives through the Budget. It also makes provision for key infrastructure projects including the coal power plants and Upper Kotmale hydro power project.

Prices of many essential goods are also likely to come down as a result of VAT administration changes.

"We have embarked on a massive development programme towards building a new Sri Lanka - a nation fully committed to develop a national economy.

In this context our special attention must be paid to accelerate the reconstruction work in the North and Eastern provinces as well as Tsunami affected coastal belt as the people in these areas have gone through immense hardships.

Farmers, fisherman, SMEs, workers, industrialists, business community, civil society and all of us must commit ourselves for hard work and create a better future for our children," the President said.