Hon. Anura Kumara Dissanayake

¶ 01 for working capital needs and investments of small and medium-scale entrepreneurs.

¶ 02 - Rs. 5,900 million has been allocated to provide loans up to Rs. 50 million to small and medium-sized enterprises. - Development of agricultural value chains. - Rs. 1,700 million has been allocated to provide agricultural loans up to Rs. 3 million at an interest subsidy of 5 per cent through the New Comprehensive Rural Credit Scheme (NCRCS). - A new loan scheme has been initiated through the Small and Medium Enterprise Development Loan Scheme and Rs. 7,700 million has been allocated for it, through which new loans up to Rs. 50 million will be provided at concessional interest rates. - Rs. 6,200 million has been allocated to provide loans up to Rs. 50 million under a concessional interest rate programme for the development of agricultural value chains. Under the Pledge Loan Scheme, small and medium-scale paddy mill owners can obtain loans up to Rs. 50 million at a concessional interest rate. Rs. 15,000 million has been allocated for this purpose. - It is proposed to allocate Rs. 800 million to establish a Sustainable Farmers' Loan Fund aimed at increasing access to agricultural projects.

¶ 03 Hon. Speaker,

¶ 04 - In addition, funds have been allocated for all concessional loan proposals, including youth entrepreneurship loan schemes, microfinance loans and women entrepreneurship empowerment loan schemes. Accordingly, loan facilities amounting to Rs. 80,000 million have been provided for 2026 for loan schemes such as refinance loans, grants, pledge loans, collateral-free loans and interest subsidies. - With the aim of expanding new investments and encouraging new investments in small and medium-sized enterprises, it is proposed to reduce the investment threshold eligible for the existing enhanced capital allowances from US Dollars 3 million to US Dollars 250,000.

¶ 05 5. Promotion of Tourism Industry

¶ 06 Hon. Speaker, the tourism sector is expected to grow rapidly, with a target of increasing tourism earnings to US Dollars 8 billion and tourist arrivals to 4 million by 2030. Steps have been taken to restructure institutions in the tourism sector to improve productivity and efficiency in order to overcome the major challenge to the development of the tourism sector, which is the coordination issues between various stakeholders. In addition to strengthening institutions, it is essential to continue investing in infrastructure development, human resource development and conducting an integrated marketing and advertising campaign to achieve the goals of various sectors of the tourism industry.

¶ 07 It is proposed to implement a tourism destination development project that focuses on nature and highlights historical heritage. For these activities, Rs. 3,500 million has been allocated from the Sri Lanka Tourism Development Authority. Under this initiative, it is proposed to implement development programmes for the coastal and marine environments of the Western Province, including the Hamilton Canal and Negombo Lagoon.

¶ 08 Further, it is planned to make the Haputale area another major tourist destination in Sri Lanka by improving the infrastructure facilities and providing necessary publicity to the tourist attractions located in the areas of Haputale, Beragala and Idalgashinna, which already have a large local and foreign tourist attraction in the Uva Province.

¶ 09 More than 900 underutilized tourist bungalows and resorts owned by the Government have been identified. Most of these are located in places with a high tourist attraction. These places are being developed into income-generating units with the support of the private sector to meet the accommodation needs of the tourism sector.

¶ 10 It is estimated that by 2030, over 800,000 skilled personnel will be required across various categories in the tourism and hospitality sector. Due to the limited physical and human resources available, the Sri Lanka Institute of Tourism and Hotel Management (SLITHM) alone cannot meet this demand. To bridge this national level workforce gap, the Sri Lanka Institute of Tourism and Hotel Management has introduced a Hospitality Multi-Purpose Programme, a short-term vocational training programme through training institutions in the public and private sectors recognized by the Tertiary and Vocational Education Commission (TVEC) throughout the Island. For this purpose, it is proposed to allocate Rs. 500 million from the underutilized Tourism Development Fund to the Sri Lanka Tourism Promotion Bureau.

¶ 11 It is expected to develop the Beira Lake and make it an attractive place in the heart of Colombo and to increase the productive use of all aspects of social, economic and environmental, including tourism activities. For this purpose, it is proposed to allocate Rs. 2,500 million from the underutilized Tourism Development Fund to the Sri Lanka Tourism Promotion Bureau.

¶ 12 The promotion of domestic flights is essential for the growth of the tourism industry. For this purpose, it is expected to complete the development work of the Hingurakgoda Airport in 2026, which has already been commenced. It is proposed to allocate a provision of Rs. 1,000 million for the development of the Sigiriya and Trincomalee domestic airports and to expand the operations of the Jaffna International Airport, and the Civil Aviation Authority will contribute additional provisions.

¶ 13 - Sri Lanka has a unique opportunity to establish itself as a leading International Transit Hub to meet the growing demand for air transport and to facilitate the movement of passengers and cargo. Our strategic location provides unparalleled access to both the western and eastern regions.

¶ 14 To make this vision a reality, we must invest in state-of-the-art airport facilities and develop our own airline with an adequate fleet of aircraft. To this end, we will resume the stalled project to expand the Bandaranaike International Airport in the first quarter of next year. Further, work is underway to successfully complete the debt restructuring process of SriLankan Airlines.

¶ 15 6. Modernization and Digitalization

¶ 16 Hon. Speaker, digital economic development is a critical path to economic growth and global competitiveness that benefits all. Sri Lanka has missed many opportunities on its development path, but this digitalization opportunity should not be missed. With a Government investment of over Rs. 25,500 million in 2026, Sri Lanka has the potential to capture a significant share of the digital transformation. By providing infrastructure needs, streamlining investment processes and fostering innovation-friendly environments, these proposals provide a workable road map for sustainable digital advancement.

¶ 17 - Under this programme, significant progress has been made in several areas such as introducing the GovPay system for payments related to Government institutions, establishing the National Cyber Security Operations Centre, improving the document services provided to citizens through the Presidential Fund and embassies, setting up the GovTech Institute to accelerate digitalization, establishing the Digital Economy Authority in the near future and successfully issuing 5G licences. To ensure the participation of every citizen, efforts are underway to expand broadband access across the country, attract foreign direct investments and foster an ecosystem that supports new entrepreneurs. Investments are being encouraged in next-generation digital infrastructure, including artificial intelligence, cloud computing and data centres. For this purpose, an allocation of Rs. 3,000 million has been provided. - The Personal Data Protection Act has been passed with amendments to enable the Data Protection Authority to operate. Through the new Digital Economy Act, steps will be taken to establish the Digital Economy Authority as well as the Digital Economy Council, which will function as a Cabinet Subcommittee on Digital Economy. - A number of critical steps for building a digital economy have been initiated, such as the Sri Lanka Unique Digital Identity (SLUDI), national data exchange, upgrading the Lanka Government Cloud infrastructure and creating specialized software for a single-window digital interface to deliver Government services. An awareness programme on a Unique Digital Identity will be launched in Sri Lanka in early 2026. The first digital identity card will be issued in the third quarter of 2026.

¶ 18 The transformation towards a society that transacts through digital channels has begun, reducing the tendency to use cash. The aim of this transformation is to facilitate transactions, reduce the cost involved, minimize misuse of money and increase efficiency. In the first quarter of 2025, more than Rs. 2,000 billion worth of transactions have been made through the Lankapay online platform alone in government payments. In order to promote the creation of a cashless society, it is proposed to provide facilities for all government transactions through the online payment mode. As an initial step, it is proposed not to charge service fees for payments to government institutions as an incentive for this purpose. It is proposed to allocate Rs. 1,000 million for covering the cost of these transactions, system improvements and public awareness. Further, Rs. 500 million has been allocated for providing the necessary facilities and promotional programmes.

¶ 19 Accordingly, effective from January 1, 2026, all service fees for electronic payments to Government institutions are permitted to be waived. Further, to promote payments using the QR code system, we propose to provide the necessary provisions through the expenditure Head of the Ministry of Digital Economy to enable QR code payments worth less than Rs. 5,000 to be made free of charge.

¶ 20 Sri Lanka has a high potential to emerge as a regional hub for setting up data centres. There are many crucial steps that we need to take in attracting investments for data centres. Among them, it is necessary to strengthen data security, confidentiality, privacy and digital governance legal systems and ensure investor confidence. We are already doing that. To encourage these investments, an attractive environment should be created in this sector for foreign and local investors through financial incentives, green energy-use incentives, low-cost electricity at the initial stage and concessional provision of necessary land. As an initial step, it is proposed to allocate Rs. 500 million for 2026.

¶ 21 The Government is providing medium-term funding for public-private partnerships and strategic digital infrastructure projects to position Sri Lanka as a regional leader in innovation, particularly in digital infrastructure and artificial intelligence. Rs. 750 million has been allocated to foster innovation, provision of funds for selected artificial intelligence projects, scholarships for foreign training and development of local language datasets and provide artificial intelligence and cloud facilities for research and development purposes in universities and schools.

¶ 22 - In order to expand access to digital technology for all citizens, it is envisaged to provide broadband vouchers for education-related access to children from disadvantaged and other low-income families. The aim is to further enable online education and participation in the digital economy. This will ensure the creation of a digital future that benefits all. - To accelerate the spread of digital technology, a simpler and faster unique approval process will be established for the construction of digital infrastructure facilities such as communication towers. It is proposed to suspend the tax applicable to new towers constructed under this digital technology expansion programme for a period of five years. - To attract investment, a fund will be established in 2026 to accelerate the growth of the start-up ecosystem. An initial Government grant of Rs. 1,500 million (US Dollars 5 million) has been allocated under the expenditure Head of the Ministry of Digital Economy for the establishment of the fund. - It is also proposed to establish "Virtual Special Economic Zones" through the Board of Investment to practically operate in Sri Lanka, generating exports and employment.

¶ 23 7. Strengthening the Research and Development Sector for Economic and Social Advancement

¶ 24 Hon. Speaker, the draft Research and Development Policy of the Government has been finalized. In line with the Government's development process, the national programme to bring research to commercialization will be implemented by identifying priorities while providing appropriate resources. The National Research, Development and Commercialization Institute and the National Council on Research and Development will be established as a centralized administrative institution to oversee the entire process, and the relevant Bill will be presented to this council in 2026.

¶ 25 A provision of Rs. 1,200 million has been allocated for the national programme to bring research to commercialization.

¶ 26 8. Continuous Programme of Clean Sri Lanka

¶ 27 In our previous Budget, it was proposed that our country would become a clean country—a clean Sri Lanka—in order to build "A Thriving Nation - A Beautiful Life". The objectives of the "Clean Sri Lanka" project include improving ethical policies and responding to a cleaner physical environment and an Island-wide moral commitment. We reiterate that the "Clean Sri Lanka" programme is not limited to one book or a single project and that this programme is not a road map that will be completed in a day, a month or a few years. It is a large-scale, non-stop programme that continues to move forward and must move forward, and new things must be added, and today, we are making it a reality. The “Clean Sri Lanka” project aims to build a society that is clean not only in terms of the environment, but also in all aspects. That continuous programme extends to making the noble aspiration of creating a clean country in every respect, such as a clean country free from drugs, a clean country free from the underworld, a clean country free from bribery and corruption, a clean country free from corrupt politicians obsessed with power, a clean country with an efficient Public Service instead of an inefficient Public Service and a clean country that respects the law and order, a reality.

¶ 28 We introduced the "Clean Sri Lanka" programme as a programme that everyone can agree on, regardless of party affiliation, in order to make this country a standardized and a beautiful country. Rs. 6,500 million has been allocated for that programme.

¶ 29 9. A Nation United National Operation

¶ 30 Hon. Speaker, I would like to remind you that the drug menace is a very serious epidemic facing our country and the real situation is more terrifying than we think. This drug epidemic is even invading the school bags of young children who know nothing. It is also knocking on the doors of almost every home. The younger generation is being pushed into a serious tragedy, and the entire country is directly and indirectly becoming the prey and victims of this disaster. This situation is sending a dangerous message to all levels of society. It is proposed that this terrible disaster must be decisively ended in order to create a clean and beautiful country. Some who have been victims of drug addiction, organized crime and corruption in the Public Service are breaking the chains that have been tied together by political zeal, one by one. This daunting and essential task is not a solitary battle that can be fought by one party or one group alone. We invite the entire country to this noble national task. Accordingly, today, "A Nation United" National Operation to eliminate toxic drugs from the entire social fabric has been launched. It is a programme that does not stop, does not retreat and fights to the end, under any challenge.

¶ 31 - It is proposed to allocate Rs. 1,500 million to implement drug control programmes covering all sectors, which are the basis for taking forward the vision of “A Nation United” National Operation. - It is proposed to establish 10 voluntary rehabilitation centres under the Rehabilitation Bureau in 10 locations including Polonnaruwa, Welikanda-Senapura to rehabilitate people addicted to toxic drugs. - Although the capacity of the existing prisons is sufficient only for 11,000 inmates, there are currently over 35,000 inmates in those prisons. It is proposed to allocate Rs. 2,000 million to meet the urgent need for efficient prison operations, i.e. the expeditious implementation of projects such as the expansion of identified prisons and relocation in recommended locations, improvement of prison infrastructure and referral of prisoners to community programmes and detention in open prisons, in accordance with the existing legal framework.

¶ 32 10. Supporting the Disabled Community

¶ 33 The disabled community, which is about 1.6 million people scattered throughout the country, representing around 7 per cent of the total population. As a country that has ratified the National Convention on the Rights of the Disabled, the Government has the responsibility to protect all the rights of the disabled community.

¶ 34 - Rs. 19,000 million has already been allocated to provide a subsidy of Rs. 10,000 each to about 140,000 persons with disabilities through the Aswesuma programme. - The existing Gazette Notification regarding the accessibility regulations for persons with disabilities will be revised in accordance with international standards and specifications, considering it a priority task. - It is proposed to allocate Rs. 1,000 million from this Budget to provide accessibility and sanitation facilities for the disabled community in public places such as Divisional Secretariats, railway stations, bus stands, courts, police stations and other places. - It has been officially announced that 3 per cent of the government service has been allocated for the disabled community, but it is not being implemented properly. Therefore, efforts will be made to recruit that 3 per cent for government service in all future Public Service recruitments. - With the aim of encouraging private employers and increasing employment, if persons with disabilities, who are able to work, are employed in the private sector, we propose to pay a wage subsidy of 50 per cent of the employees' salary, subject to a maximum of Rs. 15,000, up to 24 months. It is proposed to allocate Rs. 500 million for this purpose. - The construction of daycare centres for children with disabilities, including autism, is already underway under the Ministry of Health and the Department of Social Services. For the continuation of these activities in the coming year, Rs. 100 million has been allocated under the Ministry of Health and Rs. 447 million under the Department of Social Services. It is also proposed to allocate an additional Rs. 500 million for the establishment of daycare centres to further expand these activities.

¶ 35 11. Education and Training

¶ 36 Hon. Speaker,

¶ 37 - With the aim of reducing the cost of books, equipment and stationery for a family to educate their children and ensuring that every child receives the stationery they need for their studies, we continue the Rs. 6,000 stationery allowance provided to students in 2025, in the year 2026 as well. For this purpose, Rs. 9,000 million has been allocated under the Aswesuma Programme.

¶ 38 Since education is considered a fundamental right of all children, efforts are being made to provide education to children with disabilities through inclusive education. However, the engagement of children with disabilities in education remains very low. With the aim of sending these children to school, it is proposed to allocate Rs. 50 million from this year's Budget to provide a monthly allowance of Rs. 5,000 per disabled child from low-income families, based on medical recommendations.

¶ 39 A very low percentage of children with disabilities pursue higher education. They also study in those educational institutions in an environment where special facilities for children with disabilities are very limited. Therefore, with the aim of encouraging students with disabilities studying in higher educational institutions, it is proposed to allocate Rs. 50 million to provide a monthly allowance of Rs. 5,000 to students from low-income families.

¶ 40 Although the number of students enrolled to universities has increased to 43,000 over the past decade, the lack of adequate facilities for them has created many serious problems. Therefore, Rs. 2,500 million has been allocated to improve common facilities such as hostels, canteens and common learning areas for students.

¶ 41 Rs. 11,000 million has been allocated for the development of medical faculties at Sabaragamuwa, Moratuwa, Ruhuna, Uva Wellassa and Eastern Universities to sort out the issues caused by non-existence of professorial units and laboratory facilities required for quality medical education, even though new medical faculties had been established during past years.

¶ 42 In addition, Rs. 11,500 million has been allocated for improving facilities and research activities at universities and higher educational institutions.

¶ 43 Mahapola and bursary allowances provided for university students had been increased by Rs. 2,500 in our first Budget. In 2026 also, we propose to increase the monthly Mahapola and bursary allowances for university students by Rs. 2,500 to keep pace with the rising cost of living. Accordingly, the monthly Mahapola allowance will be increased to Rs. 10,000 and the bursary allowance will be increased to Rs. 9,000. Subsequently, the "Nipunatha Diriya Allowance" will also be increased by Rs. 2,500.

¶ 44 It is proposed to increase the allowance paid to National College of Education Scholarship recipients by Rs. 2,500. It is proposed to allocate an additional Rs. 2,750 million in addition to the amount currently allocated to pay the increased allowance.

¶ 45 Rs. 1,500 million will be allocated from the Budget for the construction of hostels in selected universities, especially in the South-East, Jaffna - Kilinochchi, Vavuniya, Eastern and Sabaragamuwa Universities. Provisions have also been made in this year's Budget for the renovation of hostels which have not been properly maintained due to the financial crisis in the country. Going forward, more attention will be paid to utilizing the building facilities of the surrounding community when providing dormitory facilities for university students.

¶ 46 - It is expected that the quality of vocational education will be improved and decent employment opportunities will be made available through the upcoming educational reforms. Accordingly, activities such as improving the facilities of vocational training centres, modernizing subject courses and training teachers and instructors will continue. For this purpose, the necessary work to upgrade nine vocational education and vocational training centres as Centres of Excellence and to upgrade 50 training centres will commence in 2026. Rs. 8,000 million has been allocated from the Budget for the improvement of overall vocational training education, including Rs. 2,000 million.

¶ 47 12. A Healthy Population for a Developed Country

¶ 48 Hon. Speaker, declining birth rates, the increasing elderly population, increasing prevalence of non-communicable diseases, nutritional problems and climate change have adversely affected the health of the entire human community. Despite the existence of free healthcare services, it is an issue that people have to bear significant personal expenses for their health needs for a long time. The Government will provide solutions to these issues in the coming years, utilizing modern technology.

¶ 49 - We propose to establish "Arogya" centres covering between 5,000 - 10,000 people with the aim of increasing people's access to services aimed at primary health and well-being. We propose to allocate Rs. 1,500 million to implement this concept as a pilot project in 2026 in locations such as maternity and children’s clinics, Medical Officer of Health (MOH) offices, etc., which currently provide various health services and have the necessary infrastructure. Considering its results, this programme will be implemented throughout the country over the next three years in collaboration with provincial councils. - Secondary health services are provided through 82 Base Hospitals. The facilities of most of these hospitals have not been developed recently. A provision of Rs. 31,000 million has been made to commence the first year of a five-year programme to improve the quality of secondary health services by developing these hospitals. - Cardiovascular diseases are at a significant level in Sri Lanka and account for nearly 40 per cent of all deaths, and it continues to grow. The Cardiology Unit of the Colombo National Hospital, although operating as the largest and the most advanced cardiac care centre in Sri Lanka, has failed to accommodate the increasing number of patients due to the limited space and limited facilities. Due to this, people have had to wait on waiting lists for long periods of time or spend a lot of money to obtain services from the private sector. As a solution to these problems, Rs. 200 million has been allocated to begin the initial work required to establish a 16-storey National Heart Unit with more space and modern equipment at a cost of Rs. 12,000 million. - A large percentage of thalassemia patients suffer from a range of physical complications and severe anemia. A high percentage of patients will require lifelong blood transfusions or other treatments, including daily iron removal therapy. As a result, not only these patients but also their families have to face severe psychological, social and economic problems. In this situation, provincial councils pay allowances of varying amounts from Rs. 500 to Rs. 5,000 to low-income thalassemia patients. We propose to allocate Rs. 250 million to provide a monthly allowance of Rs. 10,000 each to low-income thalassemia patients based on medical recommendations, in lieu of the amount paid by the provincial councils. - Demographic and Health Survey (DHS) information is very important for understanding the health status of the people and improving overall health services, based on data. This survey, which is supposed to be conducted every five years, has not been conducted since 2016. This information is very important for reporting national health outcomes related to the Sustainable Development Indicators and the Universal Health Coverage Index. Accordingly, Rs. 570 million has been allocated to conduct this survey. - We hope to provide continuous health services to the regional population, improve disease control and medical administration efficiency. Accordingly, we propose to allocate Rs. 1,000 million to relocate the Dambulla and Deniyaya Regional Hospitals to more accessible, secure, more spacious and suitable locations.

¶ 50 13. Sustainable and Inclusive Development

¶ 51 Hon. Speaker, Community Development Councils (CDCs) are established in every Grama Niladhari division to identify the real development needs and opportunities of the people. Steps are being taken to plan regional development programmes of the Government according to the development needs identified by CDCs. The responsibility of creating a prosperous village and a secure life in every aspect is entrusted to these CDCs. Through this, we are working to make the people the real owners of development.

¶ 52 Accordingly, in order to implement the integrated rural development programme Island-wide under the National Campaign for Eradicating Poverty, we propose to allocate Rs. 20,750 million in addition to the provision of Rs. 4,250 million allocated for the "Praja Shakthi" Programme, increasing the total allocation to Rs. 25,000 million.

¶ 53 14. Uplifting the Living Standards of Estate Workers

¶ 54 It is our position that estate workers should be paid a fair daily wage commensurate with their service. It is proposed to increase the current minimum daily wage of Rs. 1,350 to Rs. 1,550 from January, 2026. Furthermore, in addition to the salary of Rs. 1,550, it is proposed to pay Rs. 200 as a daily attendance incentive by the Government. It is proposed to allocate Rs. 5,000 million for this purpose.

¶ 55 15. Regional Development

¶ 56 The Government expects to actively involve all citizens of the country, especially the rural community, in the country's development programmes. We have given priority to improving the living standards of people living in underdeveloped areas and strengthening their social life. For national development to be successful, it is essential to improve administrative efficiency, social welfare, infrastructure including roads and strengthen economic relations at the provincial and regional levels. For this purpose, we allocate more funds than last year to the provincial councils and local government institutions.

¶ 57 - A special focus will be placed on the development of infrastructure in regional administrative complexes. It is proposed to construct a new administrative complex for the second phase of the Uva Provincial Council, a long-standing requirement. - It is noted that the lack of suitable auditorium facilities in Monaragala and Ampara Towns for public activities such as conferences, cultural and recreational activities and community meetings hinders community engagement. Therefore, it is proposed to allocate Rs. 200 million to the relevant provincial councils for the preliminary work of constructing a complex that includes auditorium facilities. - It is proposed to provide Rs. 300 million to complete development projects such as the partially completed and halted construction of the Nindavur Urban Council building in the Eastern Province after a due feasibility study. - To enhance daily travel, trade, and expand access to services for rural communities, the construction of previously started and halted roads and bridges will be reactivated and major junctions will be widened. Accordingly, Rs. 24,000 million is allocated for rural roads and Rs. 2,500 million for rural bridges.

¶ 58 16. Investing in the Silver Economy

¶ 59 Sri Lanka is undergoing a rapid demographic transition with the proportion of the population aged 60 and over growing faster than the younger population. It is proposed to allocate Rs. 10 million to the Ministry of Rural Development, Social Security and Community Empowerment to formulate a policy to make them active stakeholders in society.

¶ 60 17. Empowering Women: Nutrition, Safety, and Economic Opportunities

¶ 61 In 2026, we expect to enhance the Thriposha programme and the Monthly Nutrition Assistance Programme for Pregnant and Lactating Mothers and ensure wider coverage and improved delivery of these programmes through strengthened community health networks.

¶ 62 The contribution of the female community to our country's labour force is very important. However, the female labour force participation rate remains at a low level, around 32 per cent. This Budget has allocated Rs. 240 million to uplift self-employment, household industries, etc., carried out by women entrepreneurs across the Island at the Divisional Secretaries' Division level. Under this, efforts will be made to provide assistance to women entrepreneurs to start new businesses and strengthen self-employment activities. In addition to this, an additional Rs. 200 million is proposed to be allocated for programmes aimed at the welfare of women.

¶ 63 18. Providing Relief to Sri Lankans Abroad

¶ 64 Our highest net source of foreign exchange is the remittances made by Sri Lankans abroad. In appreciation of the contribution made by this group to the development of our country, we are introducing a housing loan scheme at concessional interest for migrant workers. It is proposed to implement the scheme using the funds of the Sri Lanka Bureau of Foreign Employment according to the interest reimbursement method.

¶ 65 Similarly, a contributory pension scheme for migrant workers is being introduced. The Bureau of Foreign Employment will carry out the necessary work to implement the basic work quickly and within the year 2026.

¶ 66 Rs. 2,000 million will be allocated from the funds of the Bureau of Foreign Employment in the initial phase of these programmes.

¶ 67 19. Mitigating the Human-Elephant Conflict

¶ 68 The human-elephant conflict results in the loss of about 80 human lives and over 260 elephants annually. The highest number of incidents are reported in the Anuradhapura, Polonnaruwa and Ampara Districts. The human-elephant conflict in Sri Lanka poses a serious threat to both the rural and national economies.

¶ 69 - Approval has been granted to procure 294 essential vehicles and modern communication equipment to enhance the efficiency of the Department of Wildlife Conservation. - An additional Rs. 300 million is already allocated to complete the construction of all electric fences in all identified, essential areas. This includes fences that are already completed but dilapidated, broken down, partially constructed or planned for construction. - It is also proposed to provide special training to 5,000 Civil Security Service Officers and attach them permanently to the Department of Wildlife to monitor elephant enclosures and minimize human-elephant conflict. - Rs. 375 million is allocated to provide food allowances and fuel allowances for equipment maintenance to Civil Security Officers assigned to monitor and maintain electric fences. - We have allocated Rs. 80 million for pasture and water source management activities to ensure the provision of food and water for elephants. - We propose to allocate an additional provision of Rs. 1,000 million in addition to the provisions allocated to the Department of Wildlife Conservation to complete the construction of electric fences and other related tasks to control human-elephant conflict. - We propose to allocate Rs. 10 million for research to find long-term, research-based solutions beyond the construction of electric fences to reduce these human-elephant conflicts.

¶ 70 20. Promoting Drama, Performing Arts and Literature

¶ 71 A meaningful platform has been created to advance Sri Lanka's cultural diversity, reconciliation and inclusive national identity. The Government's policy framework emphasizes the importance of education, culture and inter-community dialogue in building a compassionate society that respects heritage and diversity.

¶ 72 We propose to allocate an additional Rs. 50 million in addition to the existing allocations to promote drama, performing arts and literature as an area of cultural enrichment.

¶ 73 21. Promotion of the Media Sector

¶ 74 - Due to mismanagement of media institutions of the Government, their administration has collapsed and it has become difficult to even pay the salaries of their staff. This has created an environment of constant dependence on the Government for their day-to-day operations. Experts in the field have been appointed to key positions in these institutions and efforts have been made to rebuild them. We believe that the Government should support these institutions until they are restored to normalcy. Therefore, in the 2026 Budget, Government support will be provided for the operations and essential Capital Expenditures of the Sri Lanka Broadcasting Corporation, Sri Lanka Rupavahini Corporation and Independent Television Network. - It is proposed to allocate Rs. 100 million to provide higher education scholarships and support for the technical approach required in journalism, in order to provide the necessary support for the development of the skills of journalists in line with the advancements in the field of journalism and modern technology.

¶ 75 22. Developing a Sports Culture

¶ 76 Developing a sports culture creates a healthy, vibrant, cooperative, and "An energetic citizen - Triumphant people" in society. Therefore, Rs. 1,800 million has been allocated to promote a sports culture among our children and youth by expanding opportunities for sports facilities. We propose to allocate an additional Rs. 800 million for this purpose.

¶ 77 Rs. 1,163 million has been allocated to provide facilities for players to participate in international sports competitions, second-tier sports pools, international sports tournaments, national sports competitions and high-calibre sports teams to provide facilities for about 4,000 participating athletes.

¶ 78 Under the development of sports infrastructure, Rs. 225 million has been allocated in this year's Budget for the development of sports complexes in Mannar and Vavuniya Districts and Rs. 150 million for the completion of the Kalmunai Sports Stadium. Subsequently, Rs. 150 million has been allocated for the development of sports complexes in the Northern and Eastern Provinces.

¶ 79 23. Economic Sovereignty and Food Security 23.1 Agriculture and Livestock Sector

¶ 80 Hon. Speaker,

¶ 81 - Since a higher price is given for well-dried paddy when determining the guaranteed price for paddy, it is expected that paddy drying machines equipped with modern technology will be provided to the relevant farming companies or co-operative societies. In addition to managing this proposed project within the allocated funds under the "Building Production Co-operatives and Creating Young Entrepreneurs" Programme, it is proposed to allocate another Rs. 500 million. - It is proposed to provide Rs. 1,000 million to strengthen the mechanism related to the service provided by Sathosa and to improve storage facilities to minimize price fluctuations in food crops, including onions, potatoes and maize. - The Dambulla Cold Storage, which was constructed at a cost of over Rs. 500 million but is not operational due to various technical issues, should be used effectively in agricultural storage. This cold storage facility has a capacity of about 5,000 metric tons. We propose to provide the necessary provisions of Rs. 250 million in this Budget to complete the construction work that is hindering the use of the warehouse and install a solar panel system. Attention needs to be paid to a more appropriate methodology for the operation and management of this cold storage facility.

¶ 82 Efforts are being made to increase agricultural production in Matale, Kandy and other potential areas in the dry zone by using new technologies and climate-friendly irrigation technologies. For this purpose, it is proposed to provide Rs. 4,000 million for 400 identified irrigation schemes within the medium-term budgetary framework and out of this, it is proposed to allocate Rs. 1,000 million to implement 100 irrigation schemes in the year 2026.

¶ 83 Current domestic milk production is sufficient to meet about 40 per cent of the country's milk requirement, and a significant amount of foreign exchange is spent annually on importing milk and milk-related products. To become self-sufficient in milk, approximately 1,200 million litres of milk must be produced annually. The National Dairy Production Programme is designed to reach the target of meeting 75 per cent of the domestic milk requirement by 2030.

¶ 84 For this programme, it is expected to implement a programme to improve the breeding, nutrition and health of dairy cattle by organizing farmers based in each Veterinary Division. For this purpose, we propose to organize farmers and increase local milk production, based on the potential of Veterinary Divisions. We propose to allocate Rs. 1,000 million for the preliminary work including the feasibility study of this project under the "Small and Medium-sized Livestock Development Programme".

¶ 85 Increasing the number of high-quality breeding animals in the livestock sector has been identified as a fundamental need to increase local animal production, and this is particularly prominent in dairy cattle and piggery sectors. Therefore, priority will be given in this Budget to improve the breeding units of several high-quality dairy cows and pig breeds and to cultivate nutritious grasses in several selected farms belonging to the National Livestock Development Board through a methodology selected after a proper study. We propose to allocate Rs. 1,000 million for this purpose.

¶ 86 It is very important to resume the construction work of the Badalgama Dairy Factory of Milko (Pvt) Ltd. The Badalgama Dairy Factory, which was started in 2015, has already been stalled, having already spent about Rs. 18,000 million of public money. This project, which has been abandoned since 2022, will be implemented in line with the Government's policy statement to increase local milk production to process milk to a higher standard in order to contribute effectively to the national economy in the future. Accordingly, it is proposed to allocate Rs. 3,000 million for the basic works required to complete the remaining works of the factory, in particular the rectification of machinery and buildings and the renovation of the factory in order to commence production. We propose to complete the work of the Badalgama Dairy Factory as soon as possible and relocate the current Narahenpita milk factory to this location.

¶ 87 Hon. Speaker, while allocating funds for development of this dairy factory, we expect to conduct an investigation into the corruption and waste of public funds that had occurred in this regard.

¶ 88 Strengthening Coconut Cultivation

¶ 89 Sri Lanka's annual coconut production is about 2,800-3,000 million nuts, of which about 70 per cent is used for domestic consumption and the rest for the coconut and coconut-based products industry. The current annual coconut production is sufficient to meet domestic consumption; however, it is not sufficient to meet the industrial demand.

¶ 90 Therefore, as a long-term strategy to increase coconut production, we have allocated Rs. 600 million for further expansion of coconut cultivation in the already established Northern Coconut Triangle based on the recommendations of the Coconut Research Institute.

¶ 91 Although coconut landowners engaged in commercial coconut cultivation have adopted fertilizer use and moisture conservation methods to some extent, the interest shown by coconut landowners with less than five acres in such methods remains relatively low. Despite the Coconut Cultivation Board having implemented a programme to use mulch for soil and moisture conservation covering about 4,000 acres of land cultivated with coconut at present, coconut cultivation needs to be further expanded to achieve its desired goals.

¶ 92 Therefore, in order to achieve the expected export targets by achieving the medium-term productivity goals of the coconut sector, it is proposed to allocate Rs. 2,500 million to implement a structured programme to motivate coconut growers who own less than five acres, out of the estimated 447,000 acres currently under coconut cultivation.

¶ 93 24. Fisheries Industry

¶ 94 24.1 Development of Infrastructure Facilities in Fishery Harbours

¶ 95 Focusing on providing necessary assistance for safe and quality fishing vessel operations, improving efficiency and minimizing post-harvest losses, we have allocated Rs. 300 million for the renovation, rehabilitation and upgrading of existing infrastructure facilities at selected fishery harbours, including Beruwala, Ambalangoda, Kudawella and Nilwella.

¶ 96 Further, in addition to the provisions already allocated for further improvement of essential infrastructure facilities in fishery harbours, it is proposed to allocate an additional Rs. 1,000 million.

¶ 97 Provisions are allocated for the improvement of the Valaichchenai Fishery Harbour with the objective of providing enhanced services, ensuring safe maritime navigation and reducing congestion in the harbour. Accordingly, Rs. 350 million has been allocated to empower the fishing community by strengthening the operations of the Valaichchenai Fishery Harbour to ensure uninterrupted operations.

¶ 98 24.2 Providing Modern Technology to Enhance the Safety of Fishermen

¶ 99 To ensure the safety of fishermen, it is proposed to allocate Rs. 100 million to provide life-saving equipment for fishermen. Many countries in the world are using modern technology to easily identify fishing spots. Providing that technology to our fishermen will lead to the advancement of the industry.

¶ 100 24.3 Increasing Fish Harvest

¶ 101 Rs. 500 million has been allocated for the development of infrastructure at the wharves to improve the living standards of the fishing community by obtaining a qualitative and quantitative fish harvest through minimizing post-harvest losses.

¶ 102 It is proposed to allocate Rs. 100 million to develop a system for identifying fishing grounds using satellite technology and communicating relevant information efficiently to the fishing community.

¶ 103 Rs. 100 million has been allocated for the development of aquaculture development centres to increase the supply of fish seeds and improve the availability of quality freshwater fish.

¶ 104 24.4 Promoting the Blue Economy

¶ 105 Sri Lanka’s blue economy plays a vital role in national prosperity and sustainable development. Sri Lanka’s strategic location in the Indian Ocean provides a unique opportunity to harness our marine and coastal resources for sustainable economic growth and also provides an opportunity to emerge as a regional hub for blue economy investments.

¶ 106 Rs. 100 million has been allocated to conduct a detailed study on the economic benefits that can be achieved through marine and coastal fisheries, marine aquaculture, ecotourism, diving-related activities, marine biotechnology and development of seabed resources in the Exclusive Economic Zone (EEZ).

¶ 107 25. Irrigation and Water Supply 25.1 Irrigation

¶ 108 Rs. 91,700 million has been allocated to uplift irrigation. We expect to achieve the Government's priority objectives such as increasing domestic agricultural production, regional development and job creation by resuming temporarily suspended projects.

¶ 109 Accordingly, Rs. 50 million has been allocated in this Budget to resume the work of the Mundeni Aru Project by commencing the initial work.

¶ 110 Further, we expect to engage in discussions with development partners to secure the required financial provisions to commence the Talpitigala Reservoir Project and the Kumbukkan Oya Reservoir Project.

¶ 111 Also, Rs. 5,000 million has been allocated to expedite the Lower Malwathu Oya Multipurpose Development Project, which will enable the cultivation of new lands related to the Yodha Wewa in the Northern Province, increase productivity of existing lands, fulfil drinking water needs and provide a solution to flooding in the Mannar District.

¶ 112 Rs. 6,500 million has been allocated for the restoration of other canal systems, including urgent initiation of restoration work of the sluice (“sorowwa”) of the Senanayake Samudraya, as well as the restoration of the Gal Oya, Rajanganaya, Huruluwewa and Minneriya reservoirs.

¶ 113 Rs. 8,350 million has been allocated for the improvement and rehabilitation of small tanks, canals and sluice systems. Under this programme, it is expected to renovate 650 tanks and nearly 350 kilometres of canals.

¶ 114 25.2 Urban Flood Control

¶ 115 Having recognized the need for a sustainable solution to urban flood control, attention has been focused on short, medium and long-term programmes. In particular, immediate solutions are required for recurring flood threats in cities such as Colombo, Gampaha, Galle, Ampara, Mannar and Puttalam. As a short and medium-term solution, it is proposed to prepare an integrated plan in collaboration with the Department of Irrigation, the Urban Development Authority, the Sri Lanka Land Development Corporation and local government institutions and to implement it within the medium-term budgetary framework. In this Budget, Rs. 250 million has been allocated for the preparation and implementation of this plan.

¶ 116 Due to the absence of a proper flood management plan, people in Ratnapura, Kalutara and Matara have faced severe difficulties. Therefore, there is a need to conduct a formal feasibility study on flood management of the Gin and Kalu Rivers. We expect, through this proposed programme, to provide additional water to the Walawe Basin and also to provide a suitable solution to the existing flood problem in Ratnapura and Kalutara Districts. It is proposed to allocate Rs. 500 million for conducting these studies.

¶ 117 A saltwater barrier constructed in 2022 across the Nilwala River in Matara has caused several issues. This situation has significantly impacted on the livelihood of the people in this area as well as those who are engaged in agriculture. In this regard, a study is currently being conducted. Rs. 1,000 million has been allocated to implement the necessary solutions based on the findings of that study. Additionally, Rs. 1,200 million has been allocated for the prompt payment of compensation for paddy lands that have been damaged and cannot be cultivated due to this flooding.

¶ 118 - It is proposed to allocate Rs. 100 million to provide an immediate practical and permanent solution to prevent coastal erosion associated with the Kalu River lagoon, restore fisheries activities hindered due to silting and blocking the estuary from sand deposition and revitalize the tourism industry in the Kalutara coastal area. - It is proposed to allocate Rs. 500 million to the Ministry of Transport, Highways and Urban Development to conduct the initial study necessary for the construction of the Kiran Bridge and the Pondukalchenai Bridge to minimize the flood risk in the Batticaloa District.

¶ 119 25.3 Improvement of Drinking Water Supply

¶ 120 The drinking water supply has so far met only 62 per cent of the requirement. The lack of access to clean drinking water has become a major problem facing the people. New water supply projects are being initiated and the ongoing projects are being completed expeditiously. Rs. 85,700 million has been allocated for the implementation of drinking water supply projects as well as community water supply projects, covering districts such as Gampaha, Kalutara, Anuradhapura, Kandy, Jaffna, Kilinochchi and Kurunegala. Furthermore, steps are being taken to implement the necessary infrastructure facilities for drinking water supply in collaboration with the private sector.

¶ 121 - To meet the urban drinking water demand in Colombo District by constructing a new water supply system in Ambatale, to update and provide new water supply to Kolonnawa and Nugegoda-Jubilee Post and to construct a new water project in Lunugamwehera in the Hambantota District to supply drinking water to people affected by water scarcity and to support the upliftment of production-oriented industries, Rs. 1,000 million has been allocated. - By 2040, it is estimated that the daily water requirement for Hambantota development will be around 300,000 cubic metres. At present, the daily water supply in the area is approximately 90,000 cubic metres, supplied through water sources including the Lunugamwehera Reservoir, Walawe River, Kirindi Oya, Kachchigal Ara, Kirama Oya and Urubokka Oya. The preliminary studies that have been conducted so far indicate that an additional 100,000 cubic metres of water per day can be obtained in the short term by investing and developing these water sources, which will support to meet future water demand. In this regard, a full feasibility study is being conducted to promptly identify and implement development needs.

¶ 122 26. Sustainable Infrastructure Development 26.1 Public Transportation

¶ 123 The current public transportation sector is facing numerous challenges. The inefficiency of the overall transportation system, the lack of adequate facilities and the insecurity within the transport network are causing passengers to further distance themselves from public transport. Achieving the Government's long-term vision of "A good public transportation service - Speedy destination" requires the creation of an efficient and sustainable passenger transportation system, which is a key priority of the current Government. For this purpose, Rs. 67,200 million has been allocated in this Budget. Among them, the main projects to be implemented include the following:

¶ 124 - To strengthen the public transportation sector, 600 buses are scheduled to be added to the long-distance service fleet by the Sri Lanka Transport Board (SLTB). Rs. 3,600 million has been allocated for the initial implementation of this project. - Furthermore, Rs. 2,062 million has been allocated for the next year to replace the worn-out engine units of 307 buses belonging to the SLTB. - Rs. 790 million has been allocated for the procurement of necessary new tools, machinery and equipment required for the depots and workshops of the SLTB. - With the objective of enhancing the efficiency and passenger-friendliness of the railway service, Rs. 3,300 million has been allocated for the initial activities related to the procurement of five new Diesel Multiple Units (DMUs) for the Sri Lanka Railways Department. Furthermore, preliminary work on the digitalization of the railway service, including the introduction of an electronic ticketing system for rail passengers, has already commenced. - Further, it has been observed that private sector service providers have reduced their bus operations on certain routes across the Island due to insufficient revenue. As a result, passengers in these rural areas experience significant hardships. Therefore, it is proposed to formulate an appropriate programme to systematically identify such routes and ensure the provision of a sustainable transport service. As an interim measure, an additional allocation of Rs. 2,000 million is proposed for the year 2026.

¶ 125 26.2 Road Development

¶ 126 The economic crisis experienced by the country led to the suspension of numerous road development projects, resulting in various complications. Measures have been taken to resolve these issues and recommence the implementation of those projects. For overall road development in the year 2026, Rs. 342,000 million or Rs. 342 billion has been allocated. This includes the following projects:

¶ 127 Central Expressway - Phase I

¶ 128 A decision has also been taken to provide financial facilities for the construction of the Kadawatha-Mirigama section of the Central Expressway, among the expressways that were currently on hold. Development work on the Kadawatha-Mirigama section has already commenced and Rs. 66,150 million has been allocated for the year 2026.

¶ 129 Central Expressway - Phase III

¶ 130 The construction of the Pothuhera-Rambukkana section of the Central Expressway - Phase III from Pothuhera to Galagedara is scheduled for completion in the first quarter of 2027. Rs. 10,500 million has been allocated for this purpose. Furthermore, it is proposed to commence construction work on the Rambukkana-Galagedara section of the same phase using domestic funding, taking into account the fiscal space. For this purpose, an allocation of Rs. 20,000 million is proposed, comprising both the remaining provisions from the Road Development Authority’s debt repayment arising from the full settlement of a portion of future loan obligations within this year and an additional Budgetary allocation.

¶ 131 Katugastota-Galagedara Road Section

¶ 132 Furthermore, the necessary feasibility studies for the widening of the Katugastota-Galagedara road section are scheduled to commence next year. In parallel with the construction of the Kandy Multi-Modal Transport Centre, provisions have been made in this Budget to widen and upgrade several access roads leading into Kandy City. These developments are expected to help reduce traffic congestion within the city to a considerable extent.

¶ 133 Kurunegala-Dambulla Proposed Expressway

¶ 134 Land acquisition activities for the proposed Kurunegala-Dambulla Expressway are currently in progress. Rs. 1,000 million has been allocated to complete the land acquisition process for this project.

¶ 135 Ruwanpura Expressway - First Section from Kahathuduwa to Ingiriya

¶ 136 The construction of the 25-kilometre section of the Ruwanpura Expressway from Kahathuduwa to Ingiriya had been undertaken in an irregular and fragmented manner, and the work was temporarily suspended with the onset of the economic crisis. As a result of these partially completed constructions, the local communities have been facing several economic, social and environmental challenges. Accordingly, it is proposed to reassess the improvement of the existing access road from Kahathuduwa to Ingiriya based on a review of the feasibility study conducted in 2018 and further analysis of the information derived from the study. Land acquisition activities for this expressway section continue and Rs. 1,500 million has been allocated for this purpose.

¶ 137 Feasibility Study on the Construction of the Link between the Port Access Elevated Highway and the Marine Drive Extension (Phase II)

¶ 138 With the objective of enhancing road connectivity to the Colombo Port and the Port City, an elevated highway project is currently under construction. To address the traffic congestion expected around the Lotus Roundabout area and its surroundings near the Galle Face, following the integration of this expressway into the national road network, Rs. 330 million has been allocated to conduct a feasibility study on constructing a link between the Port City end of the Port Access Elevated Highway and the Marine Drive.

¶ 139 26.3 Implementation of a Road Safety Programme to Minimize Traffic Accidents

¶ 140 It has been observed that road accidents have increased rapidly in recent times with a significant proportion resulting in fatalities. According to the Sri Lanka Police Road Accident Report, a total of 24,589 road-related accidents were reported in 2024, of which 2,262 were fatal, resulting in the loss of 2,368 lives. These accidents have not only caused immense hardship to the public, but have also led to considerable economic losses, as a whole.

¶ 141 It is proposed to allocate an additional Rs. 1,000 million, supplementary to the provisions already set aside, for the implementation of a comprehensive road safety programme. This programme aims to enhance road safety infrastructure through the integration of safety strategies into road design and the improvement of unsafe road sections.

¶ 142 27. Energy Sector 27.1 Green Energy

¶ 143 Hon. Speaker, since our Government assumed power in September last year, we have taken decisive measures to introduce a competitive bidding system for Government procurements with the objective of ensuring the most favourable prices for consumers. A major achievement of this effort was clearly visible in the recent awarding of power generation projects. The previous administration had awarded two tenders for a total capacity of 500 MW at a rate of US cents 8.26 per kilowatt-hour without following a proper procurement process and without even factoring in the cost of a substation for connecting the wind power capacity.

¶ 144 Hon. Speaker, recently, on 28th October, 2025, we opened two tenders for two power projects in Mullikulam and I am very proud to report to this House on the remarkable results achieved. Accordingly, bids were submitted for Phase I, 50 MW power plant, at a price of US cents 3.96 per unit and for Phase II, 50 MW power plant, at a price of US cents 3.77 per unit. In addition, the Mannar Phase 1 Expansion Project, a 50 MW project, was awarded at an impressive price of US cents 4.65 per unit.

¶ 145 27.2 People-Centric Energy Transition

¶ 146 As a major step towards a people-centric energy transition, the Sri Lanka Electricity Act was amended and four separate fully State-owned companies were established to handle the functions of generation, transmission, distribution and system control with the aim of improving the national economy and the living standards of the people.

¶ 147 According to the Long-Term Generation Plan 2025-2044 published by the Ceylon Electricity Board, it is estimated that the electricity requirement will increase by about 60 per cent in the next decade.

¶ 148 We have been debating for decades about how to generate electricity. Plans were outdated, procurement was not done properly and construction was delayed. The electricity generated was mostly used only to provide light, run a fan and to run an AC, and while it could be argued that it would improve the standard of living of the people, the weaknesses in empowering electricity consumption for economic activities remained.

¶ 149 We now focus on entering into new areas to revitalize the national economy by utilizing electricity. Namely, 1. Data centres 2. Transport electrification 3. Green hydrogen 4. Green ammonia

¶ 150 We need to develop electricity consumption that targets new economic opportunities. To achieve this, electricity transmission and distribution systems need to be developed using modern, smart technology.

¶ 151 To empower this work, an Integrated Economic Development Framework will be established by integrating energy, digital and transport.

¶ 152 It is expected to introduce the Energy Transition Act next year with the aim of establishing the necessary legal framework for this purpose.

¶ 153 28. Effective Utilization of Underutilized Buildings and Structures

¶ 154 It is currently reported that there are more than 2,700 structures built by various government agencies that are currently abandoned or partially completed and not being used properly. They can be identified as educational buildings, hospitals, textile industry buildings, vocational training centres, community halls, service centres and multi-purpose buildings, warehouses, cultural centres and other buildings.

¶ 155 We are studying the possibility of improving those underutilized buildings or structures and using them for income-generating projects such as hotels, business centres, factories or other purposes through public-private partnerships and accordingly, we are preparing the necessary plans to effectively utilize these resources.

¶ 156 Accordingly, efforts are being made to provide value for these investments by ensuring that those structures, which were built at high cost without proper feasibility studies in the past, are not let to deteriorate and are optimally used.

¶ 157 29. Supply Chain Development

¶ 158 29.1 Infrastructure Development to Improve Container Operations Within the Port

¶ 159 Sri Lanka has significant potential to become a regional leader in port logistics, leveraging its strategic location. In the next year, we expect to enhance the capacity of the Colombo Port and its operational efficiency through major development initiatives, including the Western Container Terminal Phase II Project with the support of the Asian Development Bank, feasibility studies for the proposed Ports Logistics Centres with the support of the World Bank and the proposed Colombo North Port Development Project. In addition, the Kerawalapitiya Customs Verification Centre and Trade Facilitation Centres in the Bloemendal area will be established.

¶ 160 In addition to developing the necessary infrastructure to position the ports in Sri Lanka as a leading logistics hub in the region, digitalization and automation of port operations are being enhanced to ensure seamless and efficient port operations, including the implementation of the Port Community System as an integrated data management system.

¶ 161 29.2 Infrastructure Development to Make Airport Operations more Efficient (Air Cargo Centre)

¶ 162 The second phase of the airport development, which was halted due to economic downturns and other factors, will begin construction in early 2026. JICA has already agreed to provide financial facilities for this purpose.

¶ 163 The Bandaranaike International Airport is on its way to becoming a regional hub for air cargo, with ongoing development activities, including the expansion of the SriLankan Airlines’ cargo terminal and cargo handling facilities.

¶ 164 However, to overcome further challenges, particularly in the cold chain system, lack of sufficient storage capacity and outdated systems, to achieve the full potential of the air cargo sector and to ensure operational efficiency and financial sustainability, it is proposed to provide advanced facilities such as cold storage required to handle air cargo to the newly constructed cargo terminal through a public-private partnership (PPP) model.

¶ 165 30. A New Approach to Urban Development

¶ 166 - Urban development projects have been implemented informally and without prioritization and proper study and planning, and due to that, we have not been able to achieve the desired results. Therefore, the city development process will be conducted according to a formal plan with proper studies effective from 2026. Efforts are being made to establish an efficient, sustainable tourist and investment-attractive city network. Rs. 2,000 million has been allocated to commence preliminary work to identify the feasibility of 10 identified cities across the Island, including Jaffna, Eheliyagoda, Batticaloa, Chilaw and Matara, and this amount will be released based on requirement and progress. - In order to reduce the current congestion at the entrance to Matale City, necessary measures will be taken to expand the number of lanes to four, acquire the necessary land for this purpose and prepare a city plan. It is expected to prepare the necessary city plan to provide appropriate solutions to the heavy traffic congestion in Hatton City in 2026, and also propose to provide a short-term, rapid solution to reduce the existing congestion. For this purpose, we propose to allocate Rs. 500 million from this Budget. - While paying special attention to the City of Ratnapura, it is proposed to relocate the government quarters located in the Old Town to the New Town area. We expect that this placement will be useful in fulfilling the long-term residential needs. For this purpose, it is proposed to allocate Rs. 500 million from this Budget under the Urban Development Authority.

¶ 167 30.1 Waste Management Facilities for Local Government Institutions

¶ 168 With the increasing trend of urbanization, proper solid waste management has become a challenge for local governments. Due to improper disposal of waste, environmental and health impacts, animal distress and public complaints are becoming increasingly serious day by day.

¶ 169 In response to this problem, it is proposed to allocate funds from Budget, 2026 to provide local governments with environmental-friendly, cost-effective and hygienic solid waste transport equipment such as compactors, tractors and trailers. The procurement process has already begun to purchase 700 machines with an allocation of Rs. 8,000 million from the remaining Capital Expenditure in 2025.

¶ 170 Accordingly, Rs. 900 million has been allocated for the implementation of solid waste management under the Ministry of Public Administration, Provincial Councils and Local Government to provide vehicles and equipment for the systematic disposal of solid waste and maintenance.

¶ 171 30.2 Meeting the Expenditures of Local Government Institutions (Regional Development)

¶ 172 Local Government Institutions are institutions with independent powers, but they have been made dependent on the General Treasury even for the payment of salaries. In providing provisions for the payment of salaries from the General Treasury, it is proposed to introduce a new system instead of the existing system of providing provisions by reducing the percentages of 20 and 40 per cent of the estimate.

¶ 173 Accordingly, based on the study recently conducted by the Ministry of Public Administration, Provincial Councils and Local Government, it is proposed to initiate a formal system of providing Government contribution to each local government institution, taking into account the income and actual expenditure of the local government institutions.

¶ 174 In doing so, if a budget deficit arises in a local government institution, provisions will be provided for capital expenditure to cover it.

¶ 175 Rs. 2,500 million has been allocated for the strengthening of local government institutions, improvement of infrastructure facilities in local government institutions and revenue-generation programmes.

¶ 176 30.3 Introducing Services and Facilities for the Care of Street Dogs and the Burial/Cremation of Pets

¶ 177 With the changing lifestyles in urban and semi-urban areas, the trend of having pets is growing rapidly. At the same time, burial and cremation of pets when they die remains a problem. The demand for respectful and environmentally responsible alternatives has also increased.

¶ 178 It has also been recognized that there is a need to develop a system to take care of stray dogs and pets in urban areas in collaboration with the local authorities.

¶ 179 As a consideration of this need, it is proposed to allocate Rs. 100 million to implement a pilot project under the Local Authorities of Kesbewa and Piliyandala with the aim of encouraging the provision of services for the burial and cremation of dead pets and care of stray animals.

¶ 180 31. A Safe Home for Every Individual

¶ 181 "Shade for the head is peace for the mind", every citizen believes. Having a decent home is a basic human right for every human being, regardless of their status. There are people in this country who suffer and sigh throughout their lives for a house. With the hope of bringing comfort to the lives of the citizens of our country, we are embarking on the process of fulfilling their dream of a house.

¶ 182 There are many factors that lead to housing problems. Among them, there are various reasons such as poverty, insufficient income, scarcity of land, increase in construction costs, migration, informal urbanization, displacement and natural disasters. In 2026, a housing development programme with a new approach is expected to be implemented, encompassing all social groups facing housing issues. Under this programme, construction work on 27,000 new homes, including those currently under construction, is expected to be completed.

¶ 183 31.1 Solving Housing Problems Arising out of Low-income Communities and Urbanization

¶ 184 - As a solution to the housing problems of low-income families, "A Place of Your Own - A Beautiful Life" housing programme will be implemented in several phases from next year onwards, under which it is expected to construct 70,000 houses in the medium term. For this purpose, it is proposed to allocate another Rs. 3,000 million in addition to the Rs. 7,200 million allocated for the construction of 10,000 houses in 2026. - Under the Urban Regeneration Project implemented for the people in areas identified as "Urban Estates" or urban settlements with low amenities in Colombo and its suburbs, Rs. 15,000 million has been allocated for 2026 for the construction of houses in Applewatta, Madampitiya, Fergusson Mawatha, Obeysekarapura, Stadiumgama, Colombage Mawatha and Torrington Place. - Furthermore, 1,996 houses are being constructed in Moratuwa, Peliyagoda, Dematagoda, Maharagama and Kottawa under the assistance of the Chinese Government and Rs. 6,500 million has already been allocated for this purpose. Among those houses, arrangements are also being made to provide housing for journalists and artistes. - The conditions of the old apartment complexes built by the Government are very deplorable and Rs. 1,180 million has been allocated to renovate them. - Rs. 840 million has been allocated to resettle unauthorized settlers, who have been an impediment to the development of the Kelani Valley Railway, in other suitable places.

¶ 185 31.2 Provision of Housing for the Malayagam Community

¶ 186 Rs. 4,290 million has been allocated with the assistance of the Government of India for the construction of 2,000 houses to upgrade the housing and infrastructure facilities of the Malayagam estate workers living in the Central, Uva, Sabaragamuwa, North-Western and Southern Provinces. Further, a sum of Rs. 1,305 million has been allocated for the completion of work on 943 houses currently being constructed in the Northern and Southern Provinces with the assistance of the Government of India.

¶ 187 31.3 Provision of Houses for People Displaced by Natural Disasters

¶ 188 About 9,000 rural and estate family units living in areas made vulnerable due to landslides and other environmental issues have been identified. In the next three years, it will be imperative to provide safe housing for those families. An additional Rs. 2,000 million is proposed to be allocated for the construction of houses for 1,200 such families this year, in addition to the Rs. 1,000 million already allocated.

¶ 189 31.4 Provision of Housing for Internally Displaced Communities

¶ 190 The current allocation of Rs. 3,850 million for the construction of 2,500 houses for families who do not own any houses due to the conflict in the Northern and Eastern Provinces will be increased to Rs. 5,000 million.

¶ 191 31.5 Housing Assistance for Resocialization and Childcare

¶ 192 We have embarked on a new journey by introducing a special programme in the Budget, 2025, providing a grant to young people who have grown up in children's detention centres to build a stable and safe home, giving them the strength they need to rebuild their lives. Strengthening this initiative further, we propose to provide a financial provision of Rs. 2 million to those who have lived and socialized in children's detention centres at any stage of their lives and to families of children at risk identified by the National Child Protection Authority to purchase a land and build a house, build a house on land they own or renovate existing houses. Accordingly, we propose to allocate Rs. 2,000 million for this purpose.

¶ 193 32. Modernization of the Public Service

¶ 194 To achieve future achievements economically, socially and culturally, we recognize the necessity of a strong Public Service for our country. However, at present, the Public Service bears a relatively high-cost burden for the provision of public services. Politicized recruitments to the Public Service, institutions which had historically completed their functions and various institutions that had been established for the same functions have contributed to this. We are taking steps to properly evaluate the essential services that the Government should provide and close down government institutions which had completed their functions, merge various government institutions that perform the same function and reorganize outdated objectives according to new objectives. We have initiated steps to close down 33 such institutions which do not perform any commercial, regulatory or administrative activities. Further, non-commercial institutions that have deviated from the original purpose of their establishment and are not suitable for the current context have also been identified and are prepared to be closed down.

¶ 195 The above State-owned enterprises do not contribute to the national economy or service provision, and as their financial records are very difficult to be found and also due to legal issues regarding unsettled liabilities and asset ownership, a final decision has not been taken. A unit has already been established under the Ministry of Finance to resolve these issues and expedite the process.

¶ 196 Based on the recommendations made on State-owned non-commercial institutions, 21 institutions will be reorganized to consolidate the same functions, 14 institutions in the research sector will be merged to establish one national-level institution, nine institutions that are currently not operating in a commercial model will be converted into financially independent institutions and 13 institutions will be liquidated, as the objectives for which they were established at that time are no longer needed at present.

¶ 197 32.1 Regularization of Recruitments to the Public Service

¶ 198 The Public Service mechanism has been completely paralyzed due to lack of formal recruitment for vacancies in the Public Service for many years. Therefore, after a formal study conducted by the Committee to Review the Recruitment Process and Manage the Number of Employees in the Public Service established under the Chairmanship of the Prime Minister, approval has been given to recruit nearly 75,000 people under a proper system. This includes positions such as technical officers, law enforcement officers, revenue officers etc., who are required to maintain essential public services. Also, from now on, all recruitments, promotions and other tasks in the public sector will be carried out only in accordance with the prescribed examinations and service regulations, free from political interference, to provide equal opportunities to the youth.

¶ 199 32.2 Increasing Digital Access in Government Institutions

¶ 200 The complex procedures of government institutions that directly provide public services should be simplified—Business Process Reengineering—and those facilities should be provided under digital methods expeditiously. For this purpose, it is proposed to allocate another Rs. 1,000 million in addition to the provisions currently allocated for applications in line with the digitalization programme (Digital Blue Print) already prepared by the Government.

¶ 201 32.3 Providing Vehicles Required for Government Institutions/Machinery Required for Provincial Government Institutions

¶ 202 The Government’s current fleet of vehicles and machinery is inadequate and a significant portion of the existing vehicles and machinery are obsolete, resulting in substantial expenditures on repairs and maintenance. This situation has become a significant obstacle to the continuation of the development activities that the Government is expected to achieve. Considering this situation, the Government has decided to purchase a number of vehicles and machinery essential for government institutions as well as vehicles to be provided on the basis of return after the end of the Parliament Members’ term. For this purpose, it is proposed to allocate a total of Rs. 12,500 million as the primary requirement.

¶ 203 32.4 Settlement of Outstanding Statutory Payments of Government Institutions

¶ 204 Due to lack of proper management or financial discipline in recruiting employees for State-owned enterprises, which have been used as places to provide jobs to supporters for political gain, numerous State institutions have become a huge burden on the people, are in debt to banks and are unable to pay their Employees' Provident Funds, Employees' Trust Funds and tax payments.

¶ 205 1. Lanka Sugar Company (Private) Limited 2. Janatha Estates Development Board 3. Sri Lanka State Plantations Corporation 4. Sri Lanka Rupavahini Corporation 5. Ceylon Fisheries Corporation 6. National Livestock Development Board 7. Elkaduwa Plantations Limited 8. Sri Lanka Broadcasting Corporation 9. North Sea Limited 10. Ceylon Ceramics Corporation

¶ 206 A total of Rs. 11,000 million is required to settle the outstanding arrears of statutory allowances such as Employees' Provident Fund (EPF), Employees’ Trust Fund (ETF), Gratuity Allowances and taxes of 10 State-owned enterprises.

¶ 207 It is proposed to pay these unpaid statutory payments in phases and to allocate Rs. 5,000 million for the year 2026. It is expected that this will ensure the payment of the outstanding Employees’ Provident Funds and Employees' Trust Funds of the current employees of these institutions as well as the payment of the employee gratuity entitlements of the retired employees and to restructure their balance sheet liabilities.

¶ 208 32.5 Settlement of Treasury Guarantees and Letters of Comfort Issued by the Government to Public Enterprises

¶ 209 Treasury guarantees or Letters of Comfort have been issued to State banks for State-owned enterprises to obtain loans. Due to long-term losses and financial crises, such enterprises are unable to repay those loans. These obligations, which will be in effect until 31.12.2026, will be settled during this year considering as an urgent need.

¶ 210 32.6 Payment of Government Contributions for the Interest Paid to Senior Citizen Accounts

¶ 211 Although an additional interest of about 15 per cent was given to the savings of senior citizens, the outstanding amount that should have been paid to the banks in 2022 and 2023 but has not been paid so far is being settled. For this, from the interest to be borne by the Government, from the government contribution, the unpaid amount of Rs. 10,000 million has already been paid in 2025, and the remaining outstanding amount of Rs. 45,700 million is also being paid in full this year.