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Private sector major revenue contributor to govt.-CCC
The study was carried out by the Ceylon Chamber of Commerce on the listed companies in Sri Lanka. Of the 239 companies listed with the Colombo Stock Exchange (CSE) as at 31 March 2003, the CCC analysed the annual accounts of 207 companies for the year ended 31 March 2003 (or for year ended 31 December 2002, whichever applicable). This representative sample was made up of all sectors covered by the CSE such as Financial Services, Food & Beverage, Plantations, IT, Manufacturing etc. These findings put to rest the commonly held view that the country's much-maligned private sector is only concerned about its "bottom line", the chamber said in a statement. The study, proposed by CCC chairman Tilak de Zoysa, was carried out to counter the often-repeated a llegations leveled by politicians that the private sector was motivated solely by profit. However, as these findings prove, the contribution made by the private sector to the development of the country and to improve the standard of living of its citizens is substantial, the statement added. The value added by the 207 companies alone amounts to over nine percent of the country's GDP for 2002 (at current market prices). Of the 207 companies, 158 companies had employment data, providing direct employment to approximately 370,000 people. This study doesn't cover all registered limited liability companies in the country. For instance the apparel sector and other BOI companies based in the Katunayake and Biyagama FTZ's - most of which have high levels of employment - are not captured in the study. According to the 4th Quarter 2002 Labour Force Survey of the Department of Census and Statistics, over three million people are employed by the private sector, constituting 45 percent of the total employed population of the country. "Thus it can be said that approximately eight million of the Sri Lankan population is dependent on the private sector," the study noted. Analysis of Value Added by 207 listed companies. From the value added of the 207 companies included in the study, 34 percent had been remitted to the government as taxes thus contributing to the development of education, health, transport, infrastructure, etc in the country. This represents 22 percent of the total tax revenue of the government in 2002; 27 percent of the value added was paid to employees as remuneration and retirement benefits; the third largest slice of 13 percent was paid to financial institutions as interest while 12 percent was accounted for by depreciation leaving a balance of 14 percent at the discretion of shareholders. Over 70 percent of this balance - or 10 percent of the total value added - was re-invested in the organizations for purposes of research and development, modernization, expansion etc thus creating a platform for sustaining economic growth. Thus, the annual cash return to shareholders in the form of dividends was a mere four percent of value added or less than two percent of turnover of the companies in the study, the statement said. "It is also pertinent to mention that shareholders receive their dividends usually once or in some instances twice annually. On the other hand both the government and employees receive their share of an organizations value added on a monthly and / or quarterly basis," it said. This study didn't attempt to quantify other contributions made by the private sector towards the development of the country and the community. For instance private sector led foreign exchange earnings, sponsorships of sports and the arts, donations and other forms of assistance to charitable causes etc have not been considered for this study. |
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