AFP, COLOMBO:  Sri Lanka announced tax cuts and subsidised loans for small businesses and exporters Thursday, amid concerns a raging drought and flash flooding could drag on economic growth. Officials had warned the government’s growth target of 5 per cent was unlikely after floods and drought destroyed crops, homes and industries across the island.

Sri Lanka recorded 4.4 per cent economic growth last year before the floods in May and the onset of drought which has affected 1.5 million Sri Lankans.

Finance Minister Mangala Samaraweera said businesses would be offered heavy-subsided loans up to 750 million rupees ($5 million) and tax cuts for commercial vehicles to encourage entrepreneurship.

Households meanwhile can access incentives for rooftop solar units, while a tax on broadband would be abolished to encourage greater internet use.

“Our measures today will increase economic growth and make this country an entrepreneurs’ paradise,” Finance Minister Mangala Samaraweera told reporters.