Hon. (Dr.) Upali Pannilage - Minister of Rural Development, Social Security and Community Empowerment

¶ 01 Hon. Deputy Speaker, I am pleased to open the debate on behalf of the Government on the third day of discussions on the National People’s Power Government’s second Budget. It is unfortunate that I must remind the House what a Budget document is: after presenting the Appropriation Bill and the Budget Speech, detailed analysis follows and new proposals are presented. A Budget is a projection of the Government’s forward path and plans.

¶ 02 The Opposition Leader selected a few items and attempted to claim we have not fulfilled the 2025 Budget. Based on what appears to be old data—perhaps the first six months—he chose certain proposals and alleged non-implementation. I have the Budget Review from Parliament’s Research Division as at 7 November 2025, with data up to 30 September 2025. The average expenditure across 22 ministries is 63% as at 30 September 2025, with three months left; some ministries have exceeded 70%. Therefore, the claim that we failed to implement is false.

¶ 03 In 2016, following the 2015 political change, the then Government estimated capital expenditure at Rs. 594 billion but spent only Rs. 298 billion—50.2%. Our 2025 Budget was passed on 21 March; despite the New Year and Local Government Elections in May, by 30 September we had spent Rs. 455 billion. The people know who is lying. They will not be misled further.

¶ 04 What is our core task and direction? The Opposition seems unable to grasp it. This is Sri Lanka’s 80th Budget; 78 previous Budgets were tabled. What development did they deliver? Our policy statement, “A Prosperous Nation – A Beautiful Life,” recognizes the shattered macroeconomic foundation and our priority to stabilize it. Accordingly, in 2025 we have achieved around 5% real economic growth.

¶ 05 Through this stabilization, we have earned foreign exchange this year to date: USD 18 billion from goods and services exports, USD 6 billion from worker remittances, USD 837 million in FDI, and USD 2.8 billion from tourism—totalling about USD 27.6 billion. Our gross official reserves have reached around USD 6.5 billion, aiming for USD 7 billion, achieved while spending nearly USD 2 billion more on fuel imports than last year.

¶ 06 For the first time in two decades—since 2006—our Government revenue has reached 15.9% of GDP. The Opposition Leader says we exceeded IMF targets. IMF targets are theirs; our concern is stabilizing the macroeconomy. In 2026, we report the highest primary surplus, exceeding the 2.3% target—again, this strengthens debt repayment capacity.

¶ 07 On debt: in 2022, we defaulted, unable to service external debt, with total external obligations near USD 38 billion. We continue to service bilateral and multilateral debts. The issue was about USD 15 billion of high-interest International Sovereign Bonds, most—USD 12.5 billion—contracted between 2015–2019. Despite this borrowing, growth turned negative. We are now addressing debt sustainability through a scientific, well-planned approach: from 114% of GDP in 2022, public debt has been brought down to around 97%, targeting about 87% within three years.

¶ 08 In 2025, we allocated USD 2.435 billion for external debt service; USD 2.035 billion was due, and we have already paid USD 1.948 billion, with the remainder to be settled before year-end. We are servicing ISBs and bilateral and multilateral debts. These cannot be handled via “personal relationships.” Max Weber’s theory of bureaucracy emphasizes impersonal relations; we manage public finances prudently, transparently, and with good governance.

¶ 09 The macro gains we have achieved will be channelled to people’s welfare over the coming years. For 2026, we have allocated Rs. 837 billion for social protection. Our Treasury now has revenues exceeding Rs. 1 trillion, and reserves have grown. We will drive rural upliftment, support plantation workers, and improve ordinary lives—delivering the prosperity dividends widely.

¶ 10 We stabilized the economy and implemented social measures: we increased public sector salaries in three phases over three years—the first phase this year; the second will be in this Budget. Private sector salaries were also increased, with more to come. For plantation workers, a longstanding issue, we are arranging to increase wages by about Rs. 10,000 from next year.

¶ 11 Our President, as Finance Minister, set six core objectives in the Budget: inclusive and sustainable growth; export diversification and higher income; debt sustainability; strengthening the productive economy; ending rural poverty; and digitalization. Critics mislabel us—IMF-driven, neoliberal, communist. They do not understand our strategy: the State intervenes in markets when necessary while recognizing the private sector, especially MSMEs. We have allocated Rs. 80,000 million for MSME development, and through my Ministry’s Samurdhi Department, approximately Rs. 60,000 million in credit facilities to revive micro and small businesses. We deploy multiple instruments—not a revolving door of ad hoc welfare labels. We provide social protection: aswesuma cash transfers have been increased from Rs. 8,500 to Rs. 10,000 and from Rs. 15,000 to Rs. 17,500.

¶ 12 We have reoriented the Samurdhi Department to community empowerment across five pillars: economic, psychosocial, social, financial literacy, and social protection. The Sri Lanka Social Security Board under our Ministry has introduced a contributory pension scheme especially for informal sector workers.

¶ 13 Our third approach is the national “Praja Shakthi” programme to eradicate rural poverty—participatory, bottom-up planning through village-level People’s Development Councils, aligning with district and divisional committees, leveraging local resources and expertise. Rs. 25,000 million are allocated for this. Additionally, irrigation, rural roads, and plantation infrastructure funds will be directed to ending rural poverty.

¶ 14 We pledged a prosperous nation and beautiful lives for all—Sinhala, Tamil, Muslim, Burgher, Malay. Our Cabinet includes professionals who left careers to serve. Through collective effort, planning, and sacrifice, we will transform Sri Lanka and improve everyone’s lives. Thank you.