Four strategies to keep growth momentum

Four strategies to keep growth momentum BY R. SURENTHIRA KUMAR BUDGET 2006 is guided by a fourprong strategy to ensure continued growth. Under the first strategy, which is to accelerate economic activities, funding for the operating and development expenditure will be increased by 13%. It proposes that RM136.8 billion be allocated to sustain the growth momentum. To nurture the social sector which encompasses education, health and housing RM9.9 billion will be provided while the security sector is allocated RM5.6 billion and RM3.6 billion is for administration. The economy and infrastructure in the rural areas will be further improved with an allocation of RM5.7 billion. A substantial portion of the allocation, RM2.7 billion is for the implementation of agriculture projects, particularly value- added activities that can generate higher income for the farmers. A sum of RM1.2 billion is set aside for education, RM581 million for the construction and upgrading of roads and RM299 million for water and electricity supply. Abdullah said the government is aware of complaints of inadequate basic infrastructure facilities, particularly in rural areas. He urged MPs, state development officers and district officers to identify a list of basic infrastructure urgently required in their areas before submitting it to the Implementation Unit in his department before the end of November to facilitate implementation. Abdullah said there is also a need to emphasise the development of soft infrastructure, which includes human capital, management and organisational systems and thoroughly inculcate the cul ture of maintenance. Under the second strategy, business-friendly policies and measures will be undertaken. To reduce the cost of doing business, tax and non-tax measures will be introduced. Group relief to companies within a group, with a minimum of 70% ownership between them for those venturing into highrisk projects, will be allowed. The relief allows 50% of a company's current year losses to be offset against the profits of other companies in the same group. Accumulated losses and unabsorbed capital allowances will allowed to be carried forward and the accumulated losses deducted, during the pioneer period from the post-pioneer income, for companies granted pioneer status. The third strategy involves the development of human capital whereby, emphasis will be given to skills training and technical expertise. Enrolment of students in technical, vocational and skills training will be increased to 98,000 students next year from the present 72,000 with an allocation of RM1 billion for trade and industrial training. Under the fourth strategy, the well-being and quality of life of the Rakyat will be enhanced. The government has given the assurance there will be no more hike in petrol, diesel and cooking gas prices up to year-end nor rise in toll rates up to end of 2006. With the exception of Sarawak, a 40% reduction in road tax for private diesel vehicles exceeding 1,600cc will be given effective Oct 5. To eradicate poverty, RM700 million has been allocated to increase the income of rural population and to provide houses for the hardcore poor in rural areas.