The Hon. Ravi Karunanayake

¶ 01 Hon. Speaker, I am pleased to have the opportunity to speak a few words on President Anura Dissanayake’s inaugural Budget. A Budget is about allocating limited resources among unlimited demands by prioritization. It should empower the economy, reduce poverty, and ease the burdens on all—creating jobs and self-employment, improving agricultural productivity, expanding the economy, providing housing, eradicating malnutrition, etc.

¶ 02 When I speak on this, I recall the Budgets of 2015, 2016 and 2017, and the revival given by President Ranil Wickremesinghe during 2023–2024. The Finance Ministry has capable officials—current Secretary Maninda Siriwardena, former DST A.K. Seneviratne and others—who prepare Budgets well. Likewise, President Anura Dissanayake’s Budget has been crafted in that continuity, with forward vision and consistency.

¶ 03 We often speak of 76 years of history from 1948. After Independence, UNP’s D.S. Senanayake brought the country forward under local leadership. In 1977, UNP’s J.R. Jayewardene opened the economy and integrated Sri Lanka with the world, enabling growth. In 2022, when we faced the worst economic period and the economy collapsed and no one took leadership, United National Party Leader Ranil Wickremesinghe assumed charge, stabilized the economy and laid out a pathway forward.

¶ 04 As an MP representing the UNP, I must speak of the service rendered by the Party: President Ranasinghe Premadasa built one million houses; Gamini Dissanayake created the Mahaweli program; Lalith Athulathmudali developed the Port and introduced Mahapola scholarships; we brought television and computers; established SriLankan Airlines; created Free Trade Zones; built power stations—Victoria, Randenigala, Moragahakanda; the country developed and stability was created. However, a new political current arose, with public distrust about governance, which today sees the NPP and President Anura Kumara Dissanayake victorious.

¶ 05 Now is the time to think anew. Old political ideas must be set aside. Be new, be daring and be bold! You cannot follow; you must lead.

¶ 06 I recall my political leader Lalith Athulathmudali’s maxim: judge not who says it, but what is right. I value fiscal discipline. When the economy collapsed, the IMF’s support was essential to exit quickly. But we need not accept every prescription blindly.

¶ 07 I quote from Daily Mirror of 7 February 2025: “Sri Lanka’s only viable recovery avenue is to continue the current IMF-backed path.” I agree it is the right path; the UNP supported it then, now, and will continue to do so. But again, we need not accept every single IMF condition. This is Sri Lanka’s 17th IMF engagement; the 16th program’s Finance Minister was myself. After they presented, our own capable Ministry experts could provide even better answers tailored to Sri Lanka.

¶ 08 We must be truthful with the IMF. Following through credibly is the only way to strengthen the economy. The UNP believes in an open economy, fiscal discipline, expanding the economy, and projects that catalyze development. We must evaluate projects by outcomes, not just cost of funds: assess cost-benefit and the economic rate of return; pursue economic diversification and trade facilitation; and digitize processes. With bold decisions, Sri Lanka can re-accelerate.

¶ 09 A Budget has two parts: this year’s and the Medium Term Fiscal Framework. Combined, recurrent expenditure is Rs. 5,920 billion, while, under the State Finance Management Act, capital expenditure should be around 4% of GDP. Beyond spending, I urge all to recognize that today’s investment is tomorrow’s income. Too often, recurrent spending crowds out capital. We need a primary surplus. The Rs. 1,315 billion for capital is essential; capital amortization is Rs. 1,600 billion; total spending Rs. 8,835 billion. The deficit adds Rs. 2,900 billion to our debt. Earlier answers noted debt outstanding of Rs. 29 trillion in Sept 2024; later Rs. 31 trillion. This is not a sprint; we must ensure financial discipline so the country does not fall again. Use local experts; often officials fear to sign due to later repercussions. The Cabinet must take bold responsibility, as Ranil Wickremesinghe did, thinking of the country’s future, not elections.

¶ 10 We pay Rs. 2,958 billion in interest—45% of total expenditure, 62% of revenue—among the highest in the world. The Budget rests on assumptions: 5% growth; GDP Rs. 33 trillion; ICOR about 1:6. Foundations are IMF parameters and election promises. To reach 15.1% of GDP revenue, about Rs. 5,000 billion, Inland Revenue projects a 17% increase over Rs. 1,950 billion in 2024 to Rs. 2,250 billion, and Customs a 35% increase from Rs. 1,550 billion to Rs. 2,070 billion; with excise growth too, total about Rs. 5,100 billion. But we must grow the economy, not only chase revenue. For the first time under the State Finance Management Act, the Budget targets tax revenue at 13% of GDP. As revenue rises, fiscal space allows better spending choices; we must not be automatons to the IMF. Korea is the singular strong success story; others emerged only partially. We should negotiate and present our tailored path convincingly.

¶ 11 Recurrent spending rises from Rs. 2,604 billion in 2024 to Rs. 2,970 billion in 2025. Earlier many decried large Cabinets and perks and promised savings, yet spending increased by Rs. 310 billion, with salaries up by Rs. 110 billion. Where are the savings? Practical questions matter. The Speaker’s official residence near my home is closed—why? Not using it does not save millions per month; use state assets effectively.

¶ 12 On cost of living: when Ranil handed over, rice was Rs. 125/kg; now Rs. 250; coconuts from Rs. 120 to Rs. 250–260. We must address structural issues, not trade accusations.