The Ceylon National Chamber of Industries (CNCI), premier industrial Chamber, has requested the government to support the industries with a minimum of 2% of the GDP, or Rs. 350 – 400 billion to be immediately disbursed within the next two months to keep the businesses moving by overcoming the immediate constraints for the next 6 months of the year.
Moreover, the Chamber requests another 3%, which is approximately Rs. 500 billion in the next year as long term support to venture into new businesses with innovative and high-tech products and enlarge our exports volume through effective Research and Development.
CNCI Chairman Ruwan Edirisinghe in a letter addressed to President Gotabaya Rajapaksa emphasised that innovative abilities, knowledge of many Sri Lankan inventors can be used to produce high-tech and innovative products, if there’s a platform for new product opportunities with research and Development R & D facilities.
“At present, the allocation for R&D is only around 0.17% from the GDP. We would like to request the Government to explore all possibilities to bring the R&D allocation to 1% of the GDP at least during a period of another 4 to 5 years to facilitate producing high-tech products targeting the export market,” Edirisinghe emphasised.
“The current state of the whole industrial sector is critical since many of the companies are held up with serious liquidity pressure.”
Meanwhile, CNCI Secretary General Abeyratne Muthugala speaking to ‘Daily News Finance’ said to help local industries , it essential for the Central Bank to consider increasing the total amount of current refinancing facility rather than issuing Rs.50 billion to provide working capital needs for COVID-19 hit SME sector and few other selected sectors.
He said Rs.50 billion refinancing facility is not sufficient enough to facilitate local industries to curtail the impact of COVID-19.
Despite the fact that the government announced Rs.50 billion to provide working capital for Covid-19 hit businesses and individuals , the chamber has received complaints from many industries that they have not received this relief from their banks. He said the common reason for many companies has been their annual turnover which has been above to that of Rs. 1 billion.
“We appreciate the Central Bank’s allocation of Rs. 50 billion to re-finance the SMEs and few selected sectors. Nevertheless, the Chamber is also of the view that the facility should be extended to all industries irrespective of their size or volume as all industries irrespective of its size or volume have been affected due to COVID-19,” Muthugala said.
He emphasized that the majority of SMEs are depending on the large companies for their raw materials, sub contracts etc. Due to this strong inter-dependency, it is obvious that many of the SMEs cannot survive if the large and extra-large companies do not perform well.
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