- Incentives, infrastructure support to new ventures with Rs. 100 m investment and generating 50 jobs
- Wimal and Namal to drive fresh initiative to bolster economic activities at 256 District Secretariat division levels
- Over Rs. 25 b investment likely if initiative realises minimum of 1 venture of Rs. 100 m per DS division level
To kick-start economic activity in rural areas, the Government yesterday announced a fresh plan to support launch of new industries
with investments of Rs. 100 million at Divisional Secretariat division levels.
Under this initiative the Government plans to promote at least one project at each Divisional Secretariat division and thereby generate small and medium scale enterprises, increase employment and entrepreneurialism at rural level. Promotion of value-added production utilising local resources and raw material at Divisional level is another objective along with encouraging exports and import substation.
There are 256 District Secretariat divisions in the country.
A district is divided into a number of Divisional Secretary’s Divisions (commonly known as DS Divisions), which are in turn subdivided into Grama Niladhari Divisions. If the initiative is implemented successfully, at a minimum of one Rs. 100 million venture per DS division level, the collective investment will be over Rs. 25 billion.
Cabinet this week at its meeting approved a joint proposal to this from Industries Minister Wimal Weerawansa and Youth and Sports Affairs Minister and Digital Technology and Entrepreneur Development State Minister Namal Rajapaksa.
“This will be a special program to promote entrepreneurship, new investments, industries and jobs at Divisional Secretariat division level,” Cabinet Co-Spokesman Keheliya Rambukwella told journalists yesterday. “The initiative will also help in minimising imbalance in regional development and maximising the use of abundant resources at district level for productive use,” he added.
Those keen to benefit from the initiative are required to invest Rs. 100 million and generate 50 new jobs. Starting up and operation of these new ventures will be supported with incentives or land, water and energy at concessionary rates as well as bank financing, Minister Rambukwella added.
The Central Bank in its 2020 Annual Report noted that there was widespread recognition that Micro, Small and Medium Enterprises (MSMEs) were vital for the generation of inclusive and sustainable growth, highlighting the need to devise unique policy interventions to uplift this segment.
“MSMEs play a key role in terms of employment generation and smoothing out of regional disparities. With the growing recognition of the need for a domestic production economy, there is a need to recognise the dearth of support for MSMEs, which are the backbone of a sustainable production economy,” the Central Bank noted.
Last year the unemployment rate increased to 5.5% from 4.8% in 2019 primarily due to the adverse impact of COVID-19 pandemic whilst the economy suffered its worst-ever contraction of 3.6%.
Whilst 2020 data is pending, the Western Province secured the largest share (39.1%) of the country’s nominal GDP in 2019. However, due to improved contribution from the other provinces, the share declined by 0.5% from 2018. Central (11.5%) and North Western (10.7%) Provinces were ranked at second and third positions, respectively.
Provincial GDP shares increased in Northern, Eastern, North Western and Sabaragamuwa Provinces while in Western, Central, Southern, North Central and Uva Provinces, shares decreased year-on-year.