Sri Lankan President Mahinda Rajapaksa, in his last budget presentation before the presidential election in January, granted several concessions and handouts to the people of Sri Lanka.

Rajapaksa pledged that families of military personnel and police officers would receive Rs. 1000 per a month, as well as a guaranteed a 17.6% rise in rice prices, and pledged to provide farmers with free rice for the next season.

Journalists will be given interest-free car loans and school teachers and university lecturers will receive a rise in allowances, his budget further proposed.

The president also promised free health check-ups for all citizens and a pension scheme for garment sector employees.

"This seems to be more of a populist budget. Raising of EPF contributions by employers will have an adverse impact on private sector job creation," Danushka Samarasinghe, COO at Softlogic Securities, told Reuters.

Rajapaksa, who is also the finance minister, proposed to raise minimum wages for public and private sector employees and to lower VAT.

The president said the economy would expand by 8%, with a budget deficit of 4.6% of GDP, less than the 5% in 2014.

"The policies are aimed at further consolidation towards broad-based growth-oriented development towards 2020," Treasury Secretary P.B. Jayasundera told Reuters.

According to Reuters, official budget documents showed the government revised down public investment plans to 5.6% of GDP this year from an initial 6.7%, helping cut the deficit to 5%.

The International Monetary Fund has asked the government several times not to cut public investment to achieve its budget deficit target, but the president wants to cut the deficit to 3% of GDP by 2017.