The Hon. (Dr.) Harini Amarasuriya - Prime Minister and Minister of Education, Higher Education and Vocational Education

¶ 01 Hon. Speaker, I deferred the reply to the question raised by Hon. Ravi Karunanayake on 05.02.2025. I now provide the response.

¶ 02 1) As the constitutionally mandated institution to ensure domestic price stability and its progression, the Central Bank of Sri Lanka (CBSL) conducts monetary policy. Interest rates in the country are largely determined by CBSL’s monetary policy measures. Since June 2023, amidst low inflationary pressures and with the objective of normalizing overall economic activity, CBSL has followed an accommodative monetary policy stance, reducing policy rates by a cumulative 7.75 percentage points since June 2023.

¶ 03 2) Reflecting policy easing and normalization towards historical averages, market interest rates have declined considerably. With lower rates and reduced borrowing costs, private sector credit by licensed commercial banks increased by about Rs. 790 billion during 2024. The economy is expected to have grown by around 5% in 2024.

¶ 04 3) Further reductions in interest rates depend primarily on inflation outturns and expectations, and overall economic growth. Market lending and deposit rates are interlinked; measures to reduce lending rates also lower deposit rates, impacting recipients of fixed-income returns, especially those reliant on interest income.

¶ 05 4) Beyond export growth, the Government is focusing on other avenues to earn foreign exchange to resolve the prevailing debt crisis. The Government is addressing issues faced by exporters and has provided for necessary measures in Budget 2025.

¶ 06 Ease of cargo clearance from Colombo Port:

¶ 07 Short-term measures: - Operate cargo examination yards 24/7, deploying Customs and officers from other relevant state institutions involved in clearance. - Utilize available capacity at the Asian Container Yard in Peliyagoda for holding containers pending Customs clearance. - Enhance coordination among all stakeholders to expedite Customs clearance. - Improve the efficiency of Customs’ risk management processes to reduce the volume requiring physical examination.

¶ 08 Medium-term measures: - Allocate a land parcel in the Bloemendhal area near the outbound gate for temporary parking of lorries carrying containers ready for release, subject to approvals. - Explore acquiring additional land to hold containers pending clearance by Customs and other agencies.

¶ 09 Long-term measures: - Construct a state-of-the-art container examination facility for Sri Lanka Customs at Kerawalapitiya. - Automate Sri Lanka Customs’ risk management system to enhance effectiveness in processing high-risk containers. - Integrate artificial intelligence with existing container scanners to improve accuracy in identifying contents. - Procure additional scanners to raise examination capacity to required levels.

¶ 10 Ease of Doing Business and digital payments:

¶ 11 - Rapid digitization of state institutions is essential for economic development. Some institutions already possess ICT infrastructure and have been connected to the National Payment Platform, enabling the public to make digital payments via mobile and CASA accounts. These include Sri Lanka Customs, Sri Lanka Ports Authority and the Department of Inland Revenue. - In 2024, total digital payments to these institutions amounted to Rs. 1.78 trillion, compared to Rs. 828 billion in 2023—an increase of over 100% year-on-year. - For institutions lacking ICT capacity, the Government has introduced the GovPay platform to accept online payments. The President officially launched this system on 07 February 2025. - CBSL, with licensed institutions, conducts continuous awareness and promotion programmes to accelerate digital payment adoption.

¶ 12 Investment facilitation:

¶ 13 - The Board of Investment (BOI) has established an Investor Facilitation Centre (IFC) on the 7th floor of the World Trade Center as the first point of contact, providing guidance and assistance to submit applications. - For projects requiring multiple agency approvals, the Investment Facilitation Coordination Committee (IFCC) coordinates with relevant agencies as a centralized platform so investors need not physically visit each line agency. - Some approvals may require high-level intervention; a Cabinet Subcommittee chaired by the President is proposed to meet quarterly to resolve such cases. - The BOI has initiated digitization of approval processes, including online application submission and tracking of application progress.

¶ 14 Customs operational enhancements:

¶ 15 - 24/7 container release is possible, but staffing must be augmented to sustain continuous operations. - Pre-arrival processing exists at Sri Lanka Customs; however, legislative provisions are insufficient. Amendments to the Customs Ordinance have been drafted and submitted to the Ministry of Finance for Parliamentary approval. - Post-clearance audit is being conducted by the Compliance and Facilitation Division of Sri Lanka Customs to facilitate trade.

¶ 16 Further responses to the remaining parts of Hon. Ravi Karunanayake’s question, including on the Employees’ Provident Fund, will follow as per procedure.