The President, who is also holding the Ministry of Finance, said the budget for next year was based on four principals of national security, infrastructure facilities, elevating low income sector and promoting local industries.

In his one hour and twenty minute budget speech, he said the government maintained 7% growth rate within the past three years.

Per capita income reached 1,500 US dollar mark and the government managed to reduce unemployment rate to 6.2%, said the President.

The President has proposed to increase ‘Samurdhi’ subsidy for low income sector from Rs.9600 million to Rs.10850 million, disbursement for medicine in government hospitals from Rs.11000 million to Rs.13000 million, the vote for school uniforms, lunch for school children and for scholarships from Rs.1775 million to Rs.1875 million and fertilizer subsidy from Rs.10000 million to Rs.15000 million.

He has also proposed to annul long term loans, interests and unrecovered tax from cooperative societies while an environment tax of Rs.20 a month has been proposed from families who own a permanent house and a telephone.

It has been proposed to pay the living allowance of Rs.2500 from the beginning of next year to state employees, reduce VAT for petrol from 15% to 5% from next month, pay Rs.40 for a liter of milk, absorb 15000 unemployed graduates to government sector are some of the proposals in the budget.

The budget also proposes to continue the fertilizer subsidy for farmers and pay a kerosene oil subsidy of Rs.100 per month for the low income sector.

Meanwhile, 22 Tamil parliamentarians of Tamil National Alliance (TNA) boycotted the parliament in protest of what it called a defence budget.

The parliament is scheduled to meet again on Friday to start debating the budget proposals.

Meanwhile, the parliamentary group of the main opposition United National Party (UNP) on Wednesday decided to vote against the budget.

The group met after the 2008 budget was placed by the Sri Lankan President Mahinda Rajapakse in the House and unanimously decided to vote against it.

The crucial vote on the 2008 budget will take place on November 19 (Monday).

UNP leader Ranil Wickremasinghe, who is also opposition leader in the parliament chaired the group meeting.

Party sources said members of the UNP including its leader Ranil Wickremasinghe did not attend the tea party in the middle of the budget speech by President Mahinda Rajapakse, which is unprecedented in Sri Lankan parliamentary practice.

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