Sri Lanka: Budget 2019 - Innovation and Enterprise

The bedrock of the government’s support for enterprise, SMEs and local entrepreneurs is the Enterprise Sri Lanka loan scheme, which covers a whole gamut of sectors from agriculture, to manufacturing, and the service sector. Already over Rs. 60 billion of loans have been disbursed in through the different loan schemes.  

A guarantee fund for SMEs will support the implementation of innovative business ideas whose owners lack the relevant capital or collateral. The Enterprise Sri Lanka loan schemes will also connect borrowers with institutions such as ITI, ICTA, EDB, and the Universities to link such entities with a larger ecosystem for startups and small business. 

In order to create better opportunities for startups and SMEs, government procurement will be amended to ensure that at least 10% of the value of such government procurement is ear marked for Sri Lankan SMEs.

The Enterprise Innovation Programme is being launched. This will support the development of new innovative projects and technology by Sri Lankan firms. The programme will provide matching grants for proof of concept, prototyping, R&D, and technology adoption. Rs. 40 million is allocated through the appropriations bill and a further Rs. 50 million is proposed in the budget.

Limited Liability Partnership structures were proposed in the previous budget and the legislation for this has been drafted and will be introduced into law in 2019. This will support investment in startups and venture financing. 

Ongoing investments into Sri Lanka’s technical research capacity are continued with this budget. Rs. 1.2 billion has been allocated for the nanotechnology sector, along with continued investments in the Vidathaprogramme (Rs. 114 million) to connect scientists to industry to enable transfer of technology, and the scientific development programme (Rs. 110 million). 

Along with the funding for the National Quality Infrastructure programme under the National Export Strategy, which will upgrade and integrate Sri Lanka’s quality infrastructure, investments are also continuing for physical infrastructure in the research sector including laboratory facilities for SLSI (Rs. 100 million) and the establishment of a science centre (Rs. 100 million).

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