There are many vantage points from which the current budget could be criti-ued, including major flaws in economic missmanagement or fiscal policies. There is no doubt that #ri $anka is in a favourable position, particularly after the end of the war, to utili3e the advantages accruing from the +sian growth, being net to 'ndia, and linked to hina!s economic resurgence. 5owever, it is doubtful whether the present regime is utili3ing the full potential of this undisputable advantage, given the self%interests of the ruling elite and the increasingly disdainful attitude towards the general masses and the provincial6regional development. +s many have already pointed out, the present budget is ineffective in attracting enough *oreign /irect 'nvestment */', as it could have been, or reforming the ta structure to utili3e the full potential of the domestic capital formation, not from the poor! but from the rich. ost of the present taes are indirect taes burdening the poor. "e as it may, the present article focusses, however, its attention on seemingly untouched area of complete abandonment of fiscal devolution which could have been a cornerstone of a developmental budget at this stage of social development in the country both addressing the spatial ine-uity in general and the -uestion of ethnic and social reconciliation in particular.
Fisal 'eolution )or *+s
't is possible that fiscal devolution is largely an unfamiliar concept in #ri $anka. 't is more possible that financial mandarins at the inistry of *inance are averse to the concept. "ut it has been there in practice since the 17th +mendment 189: and even it took epression at least in some form at the last budget and its speech. 't is completely absent from the present budget speech or in any tangible form in the budgetary planning documents ecept crude figures given for the allocations under the inistry of $ocal ;overnment and )rovincial ouncils. $et me first -uote what it said in the last budget by the )resident himself.
Hon. Speaker, Rs. 130 billion has been allocated in this Budget for development activities in the education, health, social service and provincial economic activities that are devolved on Provincial ouncils. !o broaden the sources of income of the Provincial ouncils, it is e"pected to allocate Rs. 3# billion from the income derived through $ation Building !a", Stamp %ut& and 'otor (ehicle Registration. )s such, it has been ensured that the Provincial ouncils could spend around Rs. 1*# billion in #013.
The above is not the only statement on fiscal devolution for the )rovincial ouncils in the last budget. There was a complete section on the subject titled <)rovincial ouncil +ctivities.= "ut the above statement is -uite sufficient to understand what was there until the present budget in terms of fiscal devolution, at least in circumscribed manner. >hile the )resident promised budgetary allocation of ?s. 170 billion from the government income at the national level, another 72 billion was allowed through sharing taes at the provincial level. These included "T, #tamp /uty and @?. +ll these seemed to be scrapped.>hy ' say <in circumscribed manner= is that even by the last budget, arrangements had been made to collect the taes through the central agencies and then allocate the estimated amounts to the )s. This is not the fiscal devolution intended under the 17th +mendment. *iscal