The Hon. Wijesiri Basnayake

¶ 01 We are debating the Mid‑Year Fiscal Position Report – 2024, presented under Section 50 of the State Finance Management Act, No. 44 of 2024.

¶ 02 First, I wish you all a prosperous 2025.

¶ 03 This Report has four main sections: the economic context; state revenue trends; state performance; and a review of ten major state‑owned enterprises. The fourth chapter concerns external financing.

¶ 04 Hon. Presiding Member, Peter Drucker asked why countries become poor and answered: not due to a lack of resources, but poor management. Post‑independence, successive rulers governed without vision or planning, leading to today’s economic, social, and political crises.

¶ 05 Before 2015, they went to international markets, borrowing at high rates—some at 7.5 per cent. Then they borrowed more to repay those loans. Now they ask us for red raw rice while having wrecked the economy—oblivious to the social consequences. In 2023, growth was –7.3 per cent. FAO reported the social tragedy: those who ate three meals now eat two; those who drank milk now drink tea; those who drank tea now drink plain water. We saw schoolchildren’s hunger and teachers organizing “lunch banks.” Pregnant mothers suffered; children were born underweight. The birth rate has fallen, with 2024 seeing 100,000 fewer births than earlier comparable periods. Those who created this now seek the IMF’s shelter.

¶ 06 Under the IMF framework, the primary balance is moving to +2.1 per cent—not because of the previous regime, but because of the dedication of our public finance officials.

¶ 07 COVID hit globally. Some countries, like India, rebounded quickly; Sri Lanka did not, lacking stable economic policy. The Report notes higher revenue, but these are IMF targets. To achieve them, the whole population was trapped in a tax net while social welfare was pruned, pushing low‑income groups from plate to gutter. Professionals were over‑taxed, triggering brain drain—doctors, academics, accountants, engineers leaving—harming services and research.

¶ 08 Our Government will achieve 2025 goals and surpass IMF’s GDP targets by 2030. We are discussing tax relief for professionals—raising the PAYE threshold from Rs. 1 million to Rs. 1.5 million per month—and incentivizing a production economy. We are strengthening social protection—Aswasuma benefits for vulnerable families, and increased, extended benefits for the elderly, differently‑abled, and those with chronic illnesses. We have introduced a Rs. 6,000 benefit for schoolchildren of Aswasuma beneficiaries, reflecting our education vision.

¶ 09 We also allocated Rs. 3,000 billion in the interim account anticipating interest payments, but debt restructuring completed by 31 December allowed us to save that amount—evidence of NPP prudence. We will build a production economy with fertilizer support, relief for dairy producers, extend the moratorium period under the Parate law for MSMEs, and grant VAT relief on milk and related products. We remain committed to “Clean Sri Lanka,” a prosperous country and dignified lives.

¶ 10 Thank you.