Hon. Anura Kumara Dissanayake

¶ 01 This brings a dangerous message at every level. To build a clean and beautiful country and to end this terrible catastrophe decisively, we must bring a comprehensive plan to eradicate drugs, organized crime, and corruption in the public service. Some who are affected by these are breaking these hard, politically entangled chains one by one out of zeal. This essential task is not a solitary war to be waged by a single party or a group. We call the entire nation to this noble national mission.

¶ 02 Accordingly, today we launch the “Whole Nation Together – National Action” to remove toxic narcotics from the entire social structure. I wish to remind you that this is a plan that will not stop under any challenge, will not retreat, and will fight to the end.

¶ 03 To advance the vision of “Whole Nation Together – National Action,” it is proposed to allocate Rs. 1,500 million to implement narcotics control programmes covering all the fundamental sectors.

¶ 04 - It is proposed to establish 10 voluntary rehabilitation centres under the Bureau of Rehabilitation to rehabilitate drug addicts in 10 locations including Polonnaruwa, Welikanda–Sainapura.

¶ 05 - Although the current prison capacity is sufficient for only 11,000 inmates, there are now over 35,000 inmates. In accordance with the existing legal framework, to meet the urgent need for effective prison operations—expanding identified prisons and relocating to proposed sites, improving prison infrastructure, referring inmates to community programmes, and holding them in open prisons—it is proposed to allocate Rs. 2,000 million for expeditious implementation.

¶ 06 10. Supporting persons with disabilities

¶ 07 Approximately 1.6 million persons with disabilities live across the country, representing about 7 percent of the population. As a nation that has endorsed the National Declaration protecting the rights of persons with disabilities, the State bears responsibility for all aspects concerning this community.

¶ 08 - Through the “Aswesuma” programme, Rs. 10,000 will be provided to approximately 140,000 persons with disabilities, for which Rs. 19,000 million has already been allocated.

¶ 09 - The Gazette-published accessibility regulations will be updated in line with contemporary needs and amended to meet international standards and benchmarks.

¶ 10 - I propose to allocate Rs. 1,000 million through this Budget to provide access facilities for persons with disabilities at Divisional Secretariats, railway stations, bus terminals, courts, police stations, and other public places.

¶ 11 - Although it is officially stated that 3 percent of public service recruitment is reserved for persons with disabilities, this is not properly implemented. Therefore, in all upcoming public service recruitments, measures will be taken to fulfill the 3 percent quota as stipulated.

¶ 12 - With the objective of harnessing the contribution of persons with disabilities to the national economy, we propose to encourage private employers and expand employment opportunities. If persons with disabilities are employed in the private sector, the Government will pay a 50 percent wage subsidy, up to a ceiling of Rs. 15,000 per month, for 24 months. We propose to allocate Rs. 500 million for this.

¶ 13 - Day-care centres for children with disabilities, including autism, under the Ministry of Health and the Department of Social Services, are already being established. To continue this in the next year, Rs. 100 million under the Ministry of Health and Rs. 447 million under the Department of Social Services have been allocated. In addition, we propose to allocate a further Rs. 500 million to expand these activities and establish more day-care centres.

¶ 14 11. Education and training

¶ 15 Mr. Speaker,

¶ 16 - To reduce the cost borne by parents for books, equipment and stationery, and to ensure every child gets the required stationery for their studies, the Rs. 6,000 stationery grant provided to students in 2025 will be continued in 2026. Rs. 9,000 million is allocated under the Aswesuma programme for this purpose.

¶ 17 Education is a fundamental right of every child, and efforts are underway to ensure inclusive education for children with disabilities. However, participation of children with disabilities in education remains low. Therefore, for children with disabilities from low-income families, we propose to allocate Rs. 50 million from this year’s Budget to provide a monthly allowance of Rs. 5,000 based on medical recommendation.

¶ 18 Although the number of students enrolling in universities has increased to 43,000 in the past decade, inadequate facilities have created many issues. Therefore, Rs. 2,500 million is allocated to improve hostels, canteens, and common learning areas for students.

¶ 19 Though new medical faculties have been established in recent years, the lack of professorial units and laboratory facilities has hampered quality medical education. Accordingly, Rs. 11,000 million is allocated to develop medical faculties at Sabaragamuwa, Moratuwa, Ruhuna, Uva Wellassa, and Eastern Universities.

¶ 20 Additionally, Rs. 11,500 million is allocated to improve facilities and research activities in universities and higher education institutions.

¶ 21 Mahapola and student bursary payments were increased by Rs. 2,500 in our first Budget. To keep up with rising living costs, we propose to increase Mahapola and student bursaries by a further Rs. 2,500 in 2026. Accordingly, the monthly Mahapola will be increased to Rs. 10,000 and the student bursary to Rs. 9,000. The “Nipunatha Sisuthiriya” allowance will also be increased by Rs. 2,500.

¶ 22 Only a very small percentage of children with disabilities pursue higher education, often in institutions with limited special facilities. To encourage students with disabilities to study in higher education institutions, we propose to allocate Rs. 50 million to provide a monthly allowance of Rs. 5,000 to students from low-income families.

¶ 23 We also propose to increase by Rs. 2,500 the allowance for National Colleges of Education scholarship recipients and, in addition to existing allocations, to allocate Rs. 2,750 million to pay these enhanced allowances.

¶ 24 We will allocate Rs. 1,500 million from the Budget to construct hostels at selected universities—Jaffna (including Kilinochchi), Vavuniya, Eastern, Sabaragamuwa, and South Eastern—and make provisions to renovate hostels that have not been properly maintained due to the financial crisis.

¶ 25 Going forward, when providing hostel facilities for university students, greater emphasis will be placed on utilizing community building facilities around universities.

¶ 26 Under ongoing education reforms, we expect to improve the quality of vocational education and create decent employment opportunities. Accordingly, we will continue to upgrade facilities at vocational training institutes, modernize curricula, and train teachers and instructors. In 2026, work will commence to upgrade 9 vocational training institutes as Centers of Excellence and to upgrade 50 institutes across the country. A total of Rs. 8,000 million, including Rs. 2,000 million specifically, is allocated for the overall development of vocational training education.

¶ 27 A healthy population for a developed nation

¶ 28 Mr. Speaker, declining birth rates, an ageing population, increasing non-communicable diseases, nutritional issues, and climate change have adversely affected the health of humanity. Despite free healthcare services, people have had to bear significant out-of-pocket expenses for long-term health needs. Using modern technology, we will provide solutions to this problem in the coming years.

¶ 29 - To increase people’s access to primary healthcare and wellness services, we propose to establish “Arogya” centres serving populations between 5,000 and 10,000. Pilot implementation will be carried out in 2026 at locations such as maternal and child clinics, Medical Officer of Health offices, and other facilities with necessary infrastructure to deliver various health services. We propose to allocate Rs. 1,500 million for the pilot, and, reviewing results, expand nationwide over three years with Provincial Councils’ cooperation.

¶ 30 Secondary healthcare services are delivered through 82 Base Hospitals. Many have not had facilities upgraded in recent years. To improve the quality of secondary healthcare services, we have made arrangements to commence the first year of a five-year programme with an allocation of Rs. 31,000 million.

¶ 31 Cardiovascular diseases account for nearly 40 percent of all deaths in Sri Lanka and continue to rise. Although the National Hospital of Colombo’s cardiology unit functions as a major cardiac care centre, limited space and facilities prevent accommodating increasing numbers of patients, resulting in long waiting lists or high private-sector costs. As a solution, we will commence initial work to establish a 16-storey National Cardiology Unit with expanded space and modern equipment at a total cost of Rs. 12,000 million, for which Rs. 200 million is allocated to start.

¶ 32 A significant share of thalassemia patients suffer from physiological complications and severe anaemia, requiring lifelong blood transfusions or other treatments including daily iron chelation, causing severe psychological, social, and economic burdens on patients and families. Currently, Provincial Councils pay Rs. 500–5,000 to low-income patients. Instead, based on medical recommendation, we propose to allocate Rs. 250 million to pay a monthly allowance of Rs. 10,000 to each low-income thalassemia patient.

¶ 33 - Population and Health Survey data (DHS) are vital to understand health status and improve services. The survey, to be conducted every five years, has not been done since 2016. For reporting on SDG indicators and the Universal Health Coverage index, we will allocate Rs. 570 million to conduct this survey.

¶ 34 - To provide permanent health services to regional populations and improve disease control and hospital administration, we propose to relocate Dambulla and Deniyaya Base Hospitals to suitable, safe, and more spacious sites that are easily accessible, with an allocation of Rs. 1,000 million.

¶ 35 13. Sustainable and inclusive development

¶ 36 Mr. Speaker, to identify people’s real development needs and opportunities, Social Development Councils have been established in every Grama Niladhari division. Responsibility for protecting the village and creating a safe life is entrusted to these councils, through which we aim to make people the true owners of development.

¶ 37 Accordingly, under the National Campaign to Eradicate Poverty, we propose to increase the allocation for the “Praja Shakthi” programme by Rs. 20,750 million, in addition to the existing Rs. 4,250 million, raising the total to Rs. 25,000 million to implement a coordinated rural development programme nationwide.

¶ 38 14. Improving the quality of life of estate workers

¶ 39 It is the Government’s position that estate workers should receive a fair daily wage commensurate with their services. I propose to increase the current minimum daily wage of Rs. 1,350 to Rs. 1,550 from January 2026. In addition, I propose that the Government provide a daily attendance incentive of Rs. 200 for days worked, for which Rs. 5,000 million will be allocated.

¶ 40 15. Regional development

¶ 41 The Government expects to actively involve all regions—especially rural communities—in development programmes. Priority will be given to improving the quality of life in underdeveloped areas and strengthening community life. For national development to succeed, administrative efficiency, social welfare, improved economic conditions, and strengthened provincial and regional infrastructure such as roads and networks are essential. Accordingly, we will allocate higher funds to Provincial Councils and Local Authorities than last year.

¶ 42 - Special attention will be paid to the infrastructure development of regional administrative complexes, including the second phase of the long-needed new administrative complex for the Uva Provincial Council.

¶ 43 - Recognizing the lack of suitable auditoriums for public events—conferences, cultural and recreational activities, and community meetings—in Moneragala and Ampara, we propose to allocate Rs. 200 million to the respective Provincial Councils for preliminary works to construct auditorium facilities.

¶ 44 - In the Eastern Province, we propose Rs. 300 million, after proper feasibility, to complete partially finished and suspended construction of the Nintavur Urban Council building.

¶ 45 - To improve daily travel, trade, and connectivity for rural communities, we will resume construction of previously initiated but suspended roads and bridges, and expand primary service access routes. Accordingly, Rs. 24,000 million is allocated for rural roads and Rs. 2,500 million for primary rural bridges.

¶ 46 16. “Silver Economy” investments

¶ 47 As Sri Lanka undergoes rapid demographic transition, those aged 60 and over are increasing faster than the youth population. To develop this population segment and make them enthusiastic partners, Rs. 10 million is allocated to the Ministry of Rural Development, Social Security, and Social Empowerment for a policy framework focusing on nutrition, community development, and social protection.

¶ 48 17. Women’s empowerment and economic opportunities

¶ 49 In 2026, we plan to expand the “Triposha” programme and the monthly nutrition assistance for pregnant and lactating mothers, and ensure supply through a strengthened public health network.

¶ 50 Women’s participation in the labour force is crucial but remains around 32 percent. At Divisional Secretariat level, we will support women entrepreneurs to start businesses and upgrade self-employment and home-based industries. This Budget allocates Rs. 240 million for these efforts. Additionally, we propose Rs. 200 million for programmes aimed at women’s wellbeing.

¶ 51 18. Facilities for Sri Lankans working abroad

¶ 52 Remittances from Sri Lankans working overseas are the largest concentrated source of foreign exchange. To acknowledge their contribution to national development, a concessional-interest housing loan scheme will be introduced for migrant workers, implemented via an interest-rebate mechanism using funds of the Sri Lanka Bureau of Foreign Employment (SLBFE).

¶ 53 A contributory pension scheme for Sri Lankans working abroad will also be introduced. Initial steps are being expedited for implementation in 2026 by the SLBFE. An initial allocation of Rs. 2,000 million from the SLBFE will support this.

¶ 54 19. Reducing the human–elephant conflict

¶ 55 Each year, human–elephant conflict causes up to about 80 human deaths and more than 260 elephant deaths, with most incidents occurring in Anuradhapura, Polonnaruwa, and Ampara Districts. This conflict threatens both the rural and national economy.

¶ 56 - Approval has been granted to procure 294 vehicles and communication equipment needed to enhance the operational capacity of the Department of Wildlife Conservation.

¶ 57 - For urgent completion of identified electric fences—new, partially completed, dilapidated, or planned—in priority areas, we propose an additional Rs. 300 million over current allocations.

¶ 58 - We propose to attach 5,000 Civil Security Service officers, specially trained in fence monitoring and human–elephant conflict mitigation, to the Department of Wildlife Conservation on a permanent basis.

¶ 59 - Rs. 375 million will be allocated as meal and fuel allowances for Civil Security personnel engaged in fence monitoring and fence/equipment maintenance.

¶ 60 - To ensure elephants have adequate fodder and water, we propose Rs. 80 million for the management of grasslands and water sources.

¶ 61 - In addition to existing allocations to the Department of Wildlife Conservation for conflict mitigation and completing electric fences, we propose an extra Rs. 1,000 million.

¶ 62 - To identify long-term solutions beyond fencing, we propose Rs. 10 million for studies.

¶ 63 20. Development of drama, performing arts, and literature

¶ 64 To advance Sri Lanka’s cultural diversity, reconciliation, and an inclusive national identity, we will create a meaningful platform and emphasize compassion, heritage, diversity, education, culture, and inter-community dialogue within the Government’s policy framework. In addition to existing provisions, I propose Rs. 50 million to develop drama, performing arts, and literature.

¶ 65 21. Media sector development

¶ 66 - Due to mismanagement, State media institutions’ administrative structures have failed, to the extent that they struggle even to pay salaries, repeatedly seeking Treasury support for daily operations.

¶ 67 - Specialists are being appointed to key positions to rebuild these institutions. Recognizing State support is necessary until they stabilize, arrangements will be made in the 2026 Budget to support operational and essential capital expenditures of the Sri Lanka Broadcasting Corporation, Sri Lanka Rupavahini Corporation, and the Independent Television Service.

¶ 68 - To keep pace with technological advances in media, we propose Rs. 100 million to provide higher education scholarships for journalists, develop skills, and support technical access necessary for journalism.

¶ 69 22. Building a sports culture

¶ 70 A vibrant sports culture creates healthy, united, and strong citizens—successful people. To expand opportunities for children and youth, Rs. 1,800 million has been allocated; we propose an additional Rs. 800 million.

¶ 71 For facilities enabling athletes to participate in international competitions—including secondary competitions, national games, and elite teams—Rs. 1,163 million has been allocated.

¶ 72 Under sports infrastructure, Rs. 225 million is allocated to improve stadiums in Mannar and Vavuniya Districts, and Rs. 150 million to complete the Kalmunai stadium. A further Rs. 150 million is allocated to develop provincial sports complexes in the Northern and Eastern Provinces.

¶ 73 23. Economic self-reliance and food security

¶ 74 23.1 Agriculture and livestock

¶ 75 Mr. Speaker,

¶ 76 - When setting guaranteed prices for paddy, since well-dried paddy gets higher prices, we will provide modern paddy-drying machines to relevant cooperatives or agricultural enterprises.

¶ 77 - Under the programme “Establishing Production Cooperatives and Developing Young Entrepreneurs,” in addition to existing allocations, we propose Rs. 500 million to manage this initiative.

¶ 78 - To increase domestic milk production—currently meeting about 40 percent of demand—and reduce significant annual foreign exchange spent on dairy imports, we must produce about 1,200 million litres per year to be self-sufficient in milk. A National Dairy Production Programme is designed to reach 75 percent of domestic demand by 2030.

¶ 79 - We will organize farmers by veterinary range to improve breeding, nutrition, and health of dairy cattle, aiming to increase local milk output. For initial work, including feasibility, under the “Small and Medium Livestock Development Programme,” we propose Rs. 1,000 million.

¶ 80 - To reduce price volatility in food crops such as big onion, potato, and maize, we propose Rs. 1,000 million to strengthen services via cooperative wholesale outlets and improve warehousing facilities.

¶ 81 - The Dambulla cold storage, built at a cost exceeding Rs. 500 million but not operational due to various technical reasons, should be effectively used as an agricultural produce warehouse with about 5,000 metric tonne capacity. We propose Rs. 250 million to complete necessary construction and install solar power, and to focus on appropriate operations and management models.

¶ 82 - To increase high-quality local livestock, especially for dairy and swine industries, enhancing the number of superior breeding units is identified as essential. Therefore, we propose Rs. 1,000 million to improve breeding units of high-yield dairy cattle and pigs, and to prioritize cultivation of nutritious fodder in about 5,000 government-owned farms selected by the National Livestock Development Board, based on proper studies and procedures.

¶ 83 - Restarting the MILCO (Pvt) Ltd. Badalgama milk factory is critical. Initiated in 2015, operations stalled despite about Rs. 18,000 million already spent. Since 2022 the project has been abandoned. In line with the Government’s future local dairy policy declaration, we propose to complete essential base works—including machinery and building repairs—allocating Rs. 3,000 million, to promptly finish and relocate the Narahenpita milk factory to this site, thereby contributing productively to the national economy. While allocating funds, we also expect investigations into corruption and waste of public funds related to this project.

¶ 84 23.2 Developing coconut cultivation

¶ 85 Sri Lanka’s annual coconut production is about 2,800–3,000 million nuts, about 70 percent for household consumption and the rest for coconut-based industries. While household demand is largely met, supply is insufficient for industrial demand. As a long-term measure, based on Coconut Research Institute recommendations, we will continue expanding cultivation in the Northern “Coconut Triangle,” allocating Rs. 600 million.

¶ 86 Commercial estates have to some extent adopted fertilizer use and moisture conservation methods, but smallholders with less than 5 acres have paid little attention. Although the Coconut Cultivation Board has implemented a programme covering about 4,000 acres to use mulching for moisture conservation, further expansion is needed to reach targets. Therefore, to meet medium-term sector goals and export targets, we propose Rs. 2,500 million for a structured programme to incentivize about 447,000 acres of existing smallholder coconut lands under 5 acres.

¶ 87 24. Fisheries

¶ 88 24.1 Developing fishery harbour infrastructure

¶ 89 - Rs. 300 million is allocated to renovate and improve infrastructure at selected fishery harbours including Nilwella. Additionally, we propose Rs. 1,000 million, over existing allocations, to continue upgrading essential harbour facilities.

¶ 90 - To increase safety, modernize services, ensure safe voyages, and reduce congestion, Rs. 350 million is allocated to develop the Valachchenai harbour.

¶ 91 - To ensure fishermen’s safety, we propose Rs. 100 million to provide personal life-saving gear. Many countries use modern technology to identify fish-rich zones. Providing such technology to our fishermen will advance the industry.

¶ 92 24.3 Increasing fish production

¶ 93 - To improve fishermen’s livelihoods by securing adequate, quality catch through reducing post-harvest losses, we propose Rs. 500 million to develop harbour infrastructure.

¶ 94 - We also propose Rs. 100 million to establish a system using satellite technology to identify fishing grounds and enable efficient communications among fishermen.

¶ 95 - To increase supply of fish seed and enhance opportunities for quality freshwater fish, we propose Rs. 100 million for aquaculture development.

¶ 96 24.4 Ocean economy development

¶ 97 Sri Lanka’s strategic position in the Indian Ocean presents a major opportunity to utilize marine and coastal resources for sustainable economic development and emerge as a regional hub for blue economy investments. We propose Rs. 100 million for a comprehensive study of economic benefits relating to marine fisheries, mariculture, tourism, renewable energy (including wind), biotechnology within the Exclusive Economic Zone, and seabed resource development.

¶ 98 25. Irrigation and water supply

¶ 99 25.1 Irrigation

¶ 100 - Rs. 91,700 million is allocated to develop irrigation. By restarting suspended projects, we expect to increase domestic production, regional development, and employment.

¶ 101 - Rs. 50 million is allocated to commence initial works of the Mundeni Aru project and restart construction.

¶ 102 - We will initiate discussions with development partners to finance the Talpitigala Reservoir project and the Kumbukkan Oya Reservoir project.

¶ 103 - Rs. 5,000 million is allocated to expedite projects such as the Pahala Malwathu Oya multipurpose development in Mannar to bring lands associated with Yoda Wewa in the Northern Province into agriculture, increase productivity of existing lands, meet drinking water needs, and address flooding.

¶ 104 - Rs. 6,500 million is allocated to rehabilitate tanks and bunds—including accelerating renovation of the sluice gates of Senanayake Samudraya—and works on Gal Oya, Rajanganaya Oya, Hurulu Wewa, and Minneriya Wewa.

¶ 105 - Rs. 8,350 million is allocated to rehabilitate minor tanks, canals, cascades, and related systems—targeting 650 urban tanks and 350 km of canals.

¶ 106 25.2 Urban flood control

¶ 107 A sustainable solution is needed for urban flooding, focusing on short-, medium-, and long-term plans. Rapid solutions are required for Colombo, Gampaha, Galle, Ampara, Mannar, and Puttalam, which are frequently affected. We propose an integrated plan by the Irrigation Department, Urban Development Authority, Sri Lanka Land Development Corporation, and Local Authorities, to be implemented within the medium-term fiscal framework, with Rs. 250 million allocated to design and implement.

¶ 108 Due to the absence of a proper flood management plan, people in Ratnapura, Kalutara, and Matara face hardships. A proper feasibility study is needed for the Kalu Ganga and Kinniya Ganga systems (Ratnapura/Kalutara region) to manage floods and evaluate sending excess water to the Walawa Ganga while identifying practical solutions for existing flood issues. We propose Rs. 500 million for these studies.

¶ 109 The saltwater barrier completed across the Nilwala Ganga in 2022 has created multiple issues, affecting livelihoods and agriculture. A study has commenced; we propose Rs. 1,000 million to implement solutions emerging from it, and Rs. 1,200 million as compensation for crop damages and for fields rendered uncultivable due to this flood hazard.

¶ 110 - To prevent coastal erosion at the Kalu Ganga estuary, clear siltation restricting lagoon flushing, restore disrupted fisheries, and improve Kalutara coastal tourism, we propose Rs. 100 million for urgent, practical, and durable solutions.

¶ 111 - In Batticaloa District, to control flood risk, we propose Rs. 500 million to the Ministry of Transport, Highways, and Urban Development for initial studies to construct the Kiran Bridge and Ponnudalkudah Chena Bridge.

¶ 112 25.3 Improving drinking water supply

¶ 113 Only about 65 percent of drinking water needs are met through formal supply, and lack of access to clean water has become a pressing issue. New projects have been initiated and ongoing schemes will be expedited. Rs. 85,700 million is allocated for community water supply schemes in districts including Gampaha, Kalutara, Anuradhapura, Kandy, Jaffna, Kilinochchi, and Kurunegala. In partnership with the private sector, we will develop necessary infrastructure for water supply.

¶ 114 - We propose Rs. 1,000 million to build a new water supply system at Ambatale to meet Colombo’s demand, upgrade and extend new supply to areas including Kollonnawa and Nugegoda–Jubilee Mawatha, and implement a scheme in Lunugamwehera to meet Hambantota’s drinking water needs and support artisan industry targeting the productive economy.

¶ 115 - Hambantota’s daily water requirement is estimated to reach about 300,000 m3 by 2040. Current supply is about 90,000 m3/day, drawn from Lunugamwehera, Walawe Ganga, Kirindi Oya, Kachchigal Ara, Kirama Oya, and Urubokka Oya. Initial studies indicate about 100,000 m3/day can be rapidly secured through investments in these sources, helping meet future demand. Therefore, a full feasibility study will be undertaken to identify rapid development needs and implement them.

¶ 116 26. Sustainable transport infrastructure

¶ 117 26.1 Public transport

¶ 118 Public transport faces multiple challenges—system inefficiency, inadequate facilities, and safety issues—pushing passengers away. To achieve the Government’s long-term goal of a “Public Transport Service – People’s Travel Choice,” our priority is to establish an efficient and sustainable passenger transport system. Rs. 67,200 million is allocated, including:

¶ 119 - Rs. 3,600 million to induct 600 buses to the Sri Lanka Transport Board (SLTB) for long-distance services.

¶ 120 - Rs. 2,062 million to re-power engines of 307 SLTB buses.

¶ 121 - Rs. 790 million to procure tools, machinery, and equipment for SLTB depots and workshops.

¶ 122 - Rs. 3,300 million for initial procurement of 5 new locomotive sets for Sri Lanka Railways and to commence digitization of ticketing and services.

¶ 123 In some routes, inadequate revenue discourages private bus operators, causing hardships to rural passengers. We propose to identify such routes and design a sustainable service model, and as an interim measure allocate an additional Rs. 2,000 million for 2026.

¶ 124 26.2 Road development

¶ 125 Following the economic crisis, many road projects were suspended, creating various issues. We have acted to resolve these and restart projects. Rs. 342,000 million is allocated for road development in 2026, including:

¶ 126 - Central Expressway Stage I (Kadawatha–Mirigama): Required financing has been arranged and works have commenced; Rs. 66,150 million is allocated for 2026.

¶ 127 - Central Expressway Stage III (Pothuhera–Galagedera): Target completion of the Pothuhera–Rambukkana section by Q1 2027; Rs. 10,500 million allocated. For Rambukkana–Galagedera, we propose to commence under domestic financing, allocating Rs. 20,000 million made available due to earlier debt repayments of the Road Development Authority.

¶ 128 - Kandy access improvements: Studies to expand the Katugastota–Galagedera road section will commence next year. Together with constructing the Kandy Multimodal Transport Centre, funds are allocated to widen and improve several access roads to reduce congestion.

¶ 129 - Kurunegala–Dambulla proposed expressway: Rs. 1,000 million is allocated to complete land acquisition.

¶ 130 - Ruwanpura Expressway Stage I (Kahatuduwa–Ingiriya): Given partial, irregular works and suspension due to the crisis, we will re-evaluate the feasibility and consider upgrading the existing access road instead, while continuing land acquisition with Rs. 1,500 million allocated.

¶ 131 - Elevated Port Access Expressway link to Marine Drive (Stage 2): Rs. 330 million allocated for feasibility to construct a connector from the Port City boundary to Marine Drive, easing congestion around Lotus Roundabout and adjacent areas.

¶ 132 26.3 Road safety programme

¶ 133 In 2024, 24,589 road accidents were reported, including 2,262 fatal accidents resulting in 2,368 deaths. Beyond tragic human costs, these cause major economic losses. We propose an additional Rs. 1,000 million, over existing allocations, to implement a comprehensive road safety programme—integrating safety strategies into roads and improving protected road sections and safety infrastructure.

¶ 134 27. Energy sector

¶ 135 27.1 Green power

¶ 136 Mr. Speaker, since our Government assumed office last September, to ensure the best price to consumers, we introduced competitive procurement for Government power purchases. The success is evident. Previously, without proper procurement, two price offers were entertained for 500 MW wind power with prices around USD 8.26 cents/kWh.

¶ 137 On 28 October 2025, for two projects at Mullakkulam, bids were invited. I am proud to report to this House that for Stage 1 (50 MW) the best price received was USD 3.96 cents/kWh, for Stage 2 (50 MW) USD 3.77 cents/kWh, and for the Mannar Stage 1 expansion (50 MW) a highly attractive USD 4.65 cents/kWh.

¶ 138 27.2 People-centric energy transition

¶ 139 To uplift the national economy and living standards through a people-centric energy transition, the Electricity Act was amended to establish four separate, wholly state-owned companies to handle generation, transmission, distribution, and corporate/administration functions.

¶ 140 According to the CEB Long-Term Generation Expansion Plan 2025–2044, electricity demand will increase by about 60 percent in the next decade. For decades we argued over how to generate power; plans lapsed, procurements faltered, and construction was delayed. Electricity use focused mostly on lighting, fans, and air conditioning—while arguably improving living standards, it lagged in driving productive economic use.

¶ 141 We will now leverage electricity to revive the national economy by targeting new sectors: 1) Data centres 2) Transport electrification 3) Green hydrogen 4) Green ammonia

¶ 142 To seize these opportunities, we must develop modern, high-capacity transmission and distribution infrastructure. An Integrated Economy Development Framework for energy, digital, and transport will be established. To underpin this, we expect to bring the Energy Transition Act next year.

¶ 143 28. Productive use of underutilized buildings and infrastructure

¶ 144 Over 2,700 buildings constructed by various State entities are abandoned or partially completed and underutilized—schools, hospitals, garment factories, vocational institutes, community halls, service centres, cultural centres, multipurpose buildings, warehouses, and more. Through public–private partnerships, we will repurpose these assets for revenue-generating uses—business centres, factories, hotels, service hubs—based on proper feasibility, to prevent waste and ensure value-appropriate utilization. Measures will be taken to match investments to suitable uses and avoid further deterioration and loss of value.

¶ 145 29. Strengthening supply chains

¶ 146 29.1 Port logistics infrastructure

¶ 147 Sri Lanka, with its strategic location, can become a regional leader in port logistics. With the Asian Development Bank’s support for West Container Terminal Stage 2, World Bank support for proposed Port Logistics Centres (PLCs), feasibility studies, and the proposed Colombo North Port development, we expect to enhance Colombo Port’s capacity and operational efficiency in the coming year. Additionally, a Kerawalapitiya customs facilitation centre and a Bloemendhal trade facilitation centre will be established. Along with infrastructure, we will digitalize/automate port operations, including implementing a Port Community System for integrated data management to ensure seamless, efficient operations.

¶ 148 29.2 Airport logistics (Air Cargo Hub)

¶ 149 After delays due to the economic downturn, Stage 2 expansion of Bandaranaike International Airport will commence in early 2026, with JICA agreeing to provide financing. With ongoing growth, including expansion of SriLankan Airlines’ cargo terminal and handling facilities, BIA is moving towards a regional air cargo hub. However, constraints in cold chain, inadequate warehousing, and outdated systems limit potential. Through a PPP model, we propose to equip the newly built cargo terminal with advanced facilities such as cold-storage warehouses to unlock full potential and ensure operational and financial sustainability.

¶ 150 30. A new approach to urban development

¶ 151 - In the past, urban projects were implemented without adequate studies, planning, or prioritization, failing to deliver expected outcomes. From 2026, urban development will follow proper plans and studies, aiming for efficient, sustainable cities attractive to tourism and investment. We will identify island-wide potential across 10 cities—including Jaffna, Eheliyagoda, Batticaloa, Chilaw, and Matara—with Rs. 2,000 million allocated for initial work, and scale support as needed.

¶ 152 - To reduce congestion entering Matale city, we will widen approaches to four lanes, acquire necessary land, and prepare a city plan. For Hatton, an urban plan will be prepared in 2026 with short-term measures to ease current congestion; Rs. 500 million is proposed.

¶ 153 - For Ratnapura, with special focus, we propose relocating Government official quarters from the old town to a new urban area to address long-term housing needs; Rs. 500 million is proposed under the UDA.

¶ 154 30.1 Waste management facilities for Local Authorities

¶ 155 Rapid urbanization has made proper solid waste management a major challenge. Improper disposal leads to environmental and health impacts, harm to animals, and public complaints. In the 2026 Budget, I propose funding to provide eco-friendly, cost-effective, and hygienic solid waste collection vehicles (compactors), tractors, and bins to Local Authorities. Procurement for 700 equipment units under the Rs. 8,000 million 2025 capital allocation has already commenced.

¶ 156 Accordingly, Rs. 900 million is allocated under the Ministry of Public Administration, Provincial Councils and Local Government to operationalize solid waste management by providing vehicles and equipment for proper disposal and maintenance.

¶ 157 30.2 Addressing Local Authorities’ expenses (regional development)

¶ 158 Local Authorities, though autonomous, have become dependent on the Treasury even for salaries. Instead of deducting 20% and 40% from assessments for salary payments as now, we propose a new method. Based on a recent study by the Ministry, we will establish a proper formula to determine Government contributions for each Local Authority considering actual revenues and expenditures. If a Local Authority still faces a deficit, capital allocations will be provided to bridge it. Rs. 2,500 million is allocated to strengthen Local Authorities, improve infrastructure, and support income generation programmes.

¶ 159 30.3 Street dog welfare and pet burial/cremation services

¶ 160 With lifestyle changes in urban/suburban areas, pet ownership is rapidly increasing, creating a need for dignified, environmentally friendly pet burial or cremation options, while also addressing widespread street dog management. In collaboration with Local Authorities, we will develop a responsible care framework. We propose Rs. 100 million for pilot projects in Kesbewa and Piliyandala Local Authorities to provide pet burial/cremation and street dog care services.

¶ 161 31. Safe housing for all

¶ 162 Every citizen aspires to “a roof for the head; comfort for the mind.” Adequate housing is a basic human right. Many suffer lifelong hardships for a home. We will embark on realizing the dream of a home to bring comfort to our people.

¶ 163 Multiple factors drive housing challenges: poverty, inadequate income, lack of land, rising construction costs, urbanization, displacement, and natural disasters. With a new inclusive approach, we plan a Housing Development Programme from 2026, aiming to complete 27,000 new houses including those already under construction.

¶ 164 31.1 Addressing low-income and urban housing issues

¶ 165 - From next year, we will implement the “A Home of Their Own – A Beautiful Life” housing programme in phases to address low-income families’ housing needs, targeting 70,000 houses in the medium term. For 2026, in addition to Rs. 7,200 million already allocated to construct 10,000 houses, we propose an additional Rs. 3,000 million.

¶ 166 - Under the Urban Relocation Programme for communities in “urban gardens” or underserved settlements in and around Colombo, Rs. 15,000 million is allocated in 2026 to construct housing in Apple Watta, Mattakkuliya, Ferguson Mawatha, Obeysekerapura, Stadiumgama, Kolonnawa Mawatha, and Torrington Place.

¶ 167 - With Chinese Government support, about 1,996 houses are under construction in Moratuwa, Peliyagoda, Dematagoda, Maharagama, and Kotte; Rs. 6,500 million has been allocated. Some houses will be provided to journalists and artists.

¶ 168 - Rs. 1,180 million is allocated to renovate old Government-built apartment complexes in poor condition.

¶ 169 - Rs. 840 million is allocated to resettle illegal occupants obstructing the Kelani Valley railway development to suitable locations.

¶ 170 31.2 Housing for the Malaiyaha community

¶ 171 With Indian Government support, Rs. 4,290 million is allocated to build 2,000 houses to improve housing and infrastructure for Malaiyaha (estate) workers living in Central, Uva, Sabaragamuwa, North Western, and Southern Provinces. Additionally, Rs. 1,305 million is allocated to complete 943 houses under construction in the Northern and Southern Provinces.

¶ 172 31.3 Housing for those displaced by natural disasters

¶ 173 About 9,000 rural and estate families living in landslide-prone and environmentally vulnerable areas have been identified. Over the next three years, it is essential to provide safe housing to these families. For this year, in addition to Rs. 1,000 million allocated to build houses for 1,200 families, we propose an additional Rs. 2,000 million.

¶ 174 31.4 Housing for internally displaced persons

¶ 175 For families in the Northern and Eastern Provinces who lost homes due to war, the current allocation of Rs. 3,850 million to construct 2,500 houses will be increased to Rs. 5,000 million.

¶ 176 31.5 Housing assistance for resocialization and child protection

¶ 177 In the 2025 Budget we launched a special programme to provide grants for building stable, safe homes for youth who grew up in care institutions, empowering them to rebuild their lives. We will strengthen this by providing up to Rs. 2 million per family identified by the National Child Protection Authority who were at any stage in child care institutions or are at risk—either to buy land and build a house, build on their own land, or renovate an existing house. We propose Rs. 2,000 million for this.

¶ 178 32. Modernizing the public service

¶ 179 We recognize that achieving economic, social, and cultural progress requires a strong public service. However, public service delivery currently incurs relatively high costs—due to politicized recruitments, institutions whose mandates are complete, and multiple entities for the same function. We will assess essential services, close institutions with completed tasks, merge overlapping entities, and restructure organizations to align with contemporary objectives. Action has begun to close 33 entities with no business, regulatory, or administrative function. Non-commercial, mandate-drifted, and obsolete institutions are also being prepared for closure.

¶ 180 Many of these entities do not contribute to the economy or service delivery; financial statements are hard to trace; and unresolved liabilities and ownership issues create legal hurdles. A dedicated unit under the Ministry of Finance has been established to resolve these and expedite action.

¶ 181 Based on recommendations for State-Owned non-commercial entities, we will merge 14 research institutions into a single national-level organization; restructure 21 entities; convert some commercial SOEs to financially autonomous status; and abolish 13 entities that no longer serve their founding purpose.

¶ 182 32.1 Regularizing public service recruitment

¶ 183 Years of irregular recruitment to fill vacancies have stalled the public machinery. Following a proper review by the Committee on Public Service Recruitment and Cadre Management established under the Prime Minister, approval has been granted to recruit about 75,000 personnel through proper procedures—covering technical, law enforcement, revenue officers, and other essential cadres. Henceforth, all public sector recruitments and promotions will be based solely on proper examinations and service rules, free of political interference, ensuring equal opportunities for youth.

¶ 184 32.2 Enhancing digital access in Government institutions

¶ 185 We must simplify complex procedures in frontline public service institutions through Business Process Reengineering and deliver services digitally. In addition to current provisions aligned with the Government’s Digital Blueprint, we propose an additional Rs. 1,000 million for inputs to accelerate digitalization.

¶ 186 32.3 Procuring essential vehicles/equipment for Government and machinery for Local Authorities

¶ 187 Insufficient and obsolete vehicles/equipment have led to high repair costs and hindered development activities. The Government will procure essential vehicles for institutions and vehicles for Members of Parliament to be returned at term end, as well as machinery for Local Authorities. We propose an initial allocation of Rs. 12,500 million.

¶ 188 32.4 Settling statutory arrears in Government institutions

¶ 189 Due to politicized hiring and lack of managerial/financial discipline, many SOEs have become a burden, indebted to banks, and unable to pay EPF, ETF, and taxes. Ten SOEs—including Sri Lanka Sugar (Pvt) Ltd, People’s Plantation Development Board, Sri Lanka State Plantation Corporation, Sri Lanka Rupavahini Corporation, Ceylon Fisheries Corporation, National Livestock Development Board, Elkaduwa Plantations Ltd., Sri Lanka Broadcasting Corporation, North Sea Ltd., and Ceylon Ceramics Corporation—require Rs. 11,000 million to settle arrears of EPF, ETF, gratuity, and taxes. We propose a phased settlement, allocating Rs. 5,000 million in 2026, ensuring payments due to current employees and retirees and restructuring balance sheet obligations.

¶ 190 32.5 Releasing Treasury guarantees and letters of comfort for SOE borrowings

¶ 191 Treasury guarantees/letters of comfort were issued for SOE borrowings. Due to prolonged losses and financial stress, many cannot repay. Obligations inactive as at 31.12.2026 will be addressed urgently and resolved within this year.

¶ 192 32.6 Government contribution to senior citizens’ fixed deposit interest

¶ 193 An additional interest (about 15 percent) was promised on senior citizens’ savings. Arrears due for 2022 and 2023, unpaid to date, will be settled. In addition to amounts already paid in 2025, we will fully settle the remaining Rs. 45,700 million within this year.

¶ 194 33. Salaries and pensions in the public sector

¶ 195 33.1 Establishing a Salaries and Pensions Commission

¶ 196 It is our responsibility to manage public sector salary and pension policies sustainably. Considering longstanding issues and fiscal management challenges, we will establish a Commission to resolve salary anomalies and issues related to public servants’ salaries, pensions, and allowances.

¶ 197 33.2 Amending appointment letter clauses on contributory pension benefits

¶ 198 Appointment letters issued to all public officers recruited on or after 01.01.2016 include clauses on entitlement to contributory pension benefits. However, considering current pension systems, implementing such provisions is impractical. The clause on pension entitlement will be removed from appointment letters, and their rights will be under the existing pension scheme.