The Hon. (Prof.) Anil Jayantha – Minister of Labour and Deputy Minister of Economic Development

¶ 01 Hon. Speaker, today we present the Vote on Account for the initial months of 2025. All Members know what a Vote on Account is and why it is needed. Due to the disruptions raised at the outset, its moving was delayed. When an Appropriation Bill has not been brought and passed, unavoidably a Vote on Account is presented to allocate funds for the first four months to maintain public services and ongoing development activities. This is presented under Article 150(2) of the Constitution and Section 23(1) of the State Public Financial Management Act, No. 44 of 2024.

¶ 02 Since during the first four months there is no other way to obtain funds to maintain public services and activities, we debate and pass a Vote on Account.

¶ 03 With the people’s mandate to the National People’s Power, we outlined measures to lift the country from its distressed state across many sectors. How we incorporate development projects into the 2025 Appropriation will be set out. Expenditures under this Vote on Account will also be tied to the 2025 Appropriation.

¶ 04 Accordingly, for the first four months, we require: - Recurrent expenditure excluding interest: Rs. 1,000 billion, - Capital expenditure: Rs. 425 billion, - Debt service (including domestic debt and other servicing, interest and amortization) in addition to external debt restructuring: Rs. 1,175 billion.

¶ 05 Total estimate: Rs. 2,600 billion. Estimated Government revenue: Rs. 1,600 billion. Primary borrowing limit: Rs. 1,000 billion.

¶ 06 Debt restructuring with the IMF and others has dragged on unusually for over two and a half years and is now at the final stage. With bilateral creditors and ISB holders, based on agreed terms, new instruments will be issued. We strive to finalize by 31 December; however, if technical reasons delay by a week or two, we have prudently proposed, in Table 2 of the Resolution, a borrowing ceiling up to Rs. 4,000 billion to cover uncertainty.

¶ 07 We inherited an economy trapped by wrong political processes and allegations of fraud and corruption. The debt overhang became unsustainable: debt grew about 15% annually since the 1990s while real growth averaged around 4.5%, indicating debt-funded projects did not generate proportional or productivity gains. Interest burdens rose sharply by 2023. Inflation, especially food inflation, soared beyond 90% in 2019–2022, hurting ordinary people and exacerbating income inequality; though now somewhat controlled, the pain remains.

¶ 08 Government revenue as a share of GDP fell to below 10% from 23.2% in 1990, despite higher rates—pointing to systemic revenue administration problems including leakages and possible corruption.

¶ 09 Externally, persistent trade deficits of USD 7–10 billion were buffered by worker remittances, but left no resilience. Recognizing this, our policy placed stabilization first—macro, fiscal, external, and social stabilization—while engaging with the IMF within a principled framework, negotiating for appropriate adjustments. We reached staff-level agreement; Board consideration is expected soon.

¶ 10 We emphasize a production economy: increasing goods and services output, integrating finance to support production, attracting domestic and foreign investors by restoring confidence. Debt restructuring is nearing completion; we have repeatedly stated that delays in the past two and a half years caused about USD 1.7 billion of avoidable additional interest due to protraction. While engaging constructively, we pursued alternatives such as a tailored DSA approach through negotiations, not coercion.

¶ 11 Social stabilization is critical: with over half the population seeking assistance, we must both create opportunities and provide targeted support—lower production costs for farmers and fishers, enhance assistance for the ultra-poor and the sick, and support schoolchildren, including a Rs. 6,000 grant for eligible students, to build a participatory, empowered society.

¶ 12 Women’s labour force participation, under 30%, must be strengthened, including by recognizing and integrating care economy components.

¶ 13 In 2025, priorities will include modernizing agriculture, moving up value chains, expanding supply chains, and supporting MSMEs and fisheries, underpinned by R&D and digitalization (with a dedicated ministry), and leveraging our geographic position in trade. We also propose a “Clean Sri Lanka” initiative as a cross-cutting effort.

¶ 14 We must tackle information asymmetries that create monopolistic rents and corruption; greater transparency and better producer–investor–worker–raw material linkages can lift productivity.

¶ 15 In attracting investment, we will deepen ease of doing business and policy certainty. Interest rates are stabilizing due to better macro management, contrary to dire predictions before the election. Colombo’s stock market is stabilizing; by year-end we expect improved international validation to attract FDI and production. Our sovereign ratings, which had sunk to “restricted default,” are showing gradual improvement; by end-2024 and through 2025 we expect further progress.

¶ 16 We are not claiming major achievements within weeks; rather, stability is emerging and being recognized domestically and internationally. Our manifesto, “A Prosperous Country – A Beautiful Life,” will translate into funded programmes in the 2025 Budget. The path is to proceed calmly and in an organized manner—slowly but steadily. We invite the Opposition to work with us. With our human capital and resources, we can build a humane, democratic, and practical economy aligned with domestic and global realities over the next decade or two, through debate and cooperation rather than disruption. I conclude with that appeal.

¶ 17 Thank you.