Colombo: President Mahinda Rajapaksa, seeking a record third term, on Friday unveiled the budget loaded with sops like tax cuts, increased salaries and welfare spending aimed at wooing voters ahead of snap presidential polls in January.
Rajapaksa, who is also the Minister of Finance, announced new proposals to increase the income of employees and enhanced the pension fund contributions to be made by the employers.
Sri Lanka will hold a snap presidential election in January, nearly two years ahead of schedule that could send the incumbent Rajapaksa into office for a record third term.
Rajapaksa today hinted at confidence in the polls, saying, "I can't see any elephant who can cause trouble for the government" -- a reference to the main opposition United National Party, whose symbol is the elephant.
As part of election freebies, Rajapaksa announced that the minimum salary of state employees is to be increased to rupees 25,000 with an enhancement of the cost of living allowance.
Over 1.2 million state service employees are being considered a solid vote base for Rajapaksa's ruling United People's Freedom Alliance (UPFA) coalition.
Academics, doctors and judicial services employees are all in the bracket for increased pay.
Parents of those serving in the armed forces and police will also receive increased payments while students are in for enhanced educational assistance.
"I have a five year plan which is aimed at enhanced growth by the year 2020", Rajapaksa said while unveiling the budget for the next year.
He proposed to reduce the value added tax to 11 per cent down from 12 per cent.
The President also announced cuts on water and electricity tariffs -- a move aimed at wooing the urban electorate who are generally seen as pro-opposition.
The fiscal deficit is to be maintained at under 4 per cent through to 2017 while the per capita income is expected to reach USD 7,500 by 2020, Rajapaksa said.
The island's current per capita is rated at USD 3,280.
Rajapaksa said Sri Lanka has reached economic growth of 8 per cent due to investments in the infrastructure and tourism sectors.
Rajapaksa, 68, came to power in 2005 and retained the presidency in 2010 on a wave of popularity after the Tamil Tigers were defeated in 2009, ending a nearly three-decade war.
The 2009 victory over the Liberation Tigers of Tamil Eelam (LTTE) helped Rajapaksa secure more than two-thirds of parliamentary seats, enabling him to amend the Constitution that had capped the presidency for a leader to two terms.
Rajapaksa's current term ends in November 2016, but according to the Sri Lankan Constitution, he can call for an early election after November 19 this year.