The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Finance and Planning

¶ 01 [3.26 p.m.]

¶ 02 Hon. Presiding Member, regarding this supplementary estimate, Rs. 500 billion is allocated for 2026 to provide relief to those affected by the disaster and to rebuild Sri Lanka, while ensuring state finance and management operate within the legal framework.

¶ 03 We passed Budget 2026 on 05 December. Due to the 2025 disaster, we had to rapidly provide relief: food for displaced people; Rs. 25,000 for cleaning homes; dry rations and other immediate interventions; and future rehabilitation. We set aside an additional Rs. 50 billion for 2025. Unlike past practice of using “urgent needs” to arbitrarily spend under 150(1)(10), we did so without increasing the total approved 2025 expenditure. Under the State Finance Management Act, primary expenditure should not exceed 13% of GDP; we stayed within that.

¶ 04 Given needs up to end-December 2025 were about Rs. 75 billion, we have already sourced Rs. 25 billion from the “Budget Contingency” (Rs. 22 billion remaining therein) and through virements we secured the balance to total Rs. 50 billion. No extra borrowing, no extra taxes.

¶ 05 For 2026, the Rs. 500 billion is additional to manage an emergency. Our primary expenditure already stands at Rs. 4,485 billion within the 13% cap. Therefore, we need additional room. By using provisions in Section 16 of the State Finance Management Act for natural disasters/emergencies, we seek Parliament’s approval transparently. Funding will come without new taxes or new borrowing: due to improved fiscal management, the 2025 primary surplus is estimated at 3.8% of GDP versus a 2.3% target. The 1.5 percentage point overperformance allows a 1.4 percentage point use toward this allocation via our cash buffer.

¶ 06 Disbursements will be staged; not all in one or two months. While the Opposition offers to help, sowing doubt is counterproductive. The President’s “please” meant: don’t undermine public trust at a time we must rebuild together.

¶ 07 On insurance: a scheme begun in 2016 led to fiscal loss. From 2016–2019 Government paid Rs. 2.8 billion in premiums; the fund paid Rs. 2.51 billion in reinsurance; claims received were only Rs. 1.4 billion; yet Government additionally paid Rs. 7.5 billion toward damages, resulting in a net Rs. 8.8 billion loss. Technical flaws extended beyond indemnity needs. We will redesign any future risk transfer properly.

¶ 08 Our relief has two tracks: immediate basic aid; and reconstruction over 1–2 years. As required by law, we present macro, growth, and fiscal implications. Growth in 2025: Q1 4.8%, Q2 4.9%, Q3 5.4%; targeting over 5% for the year and a medium-term path above 7%. Revenues exceeded expectations by Dec 15: against Rs. 4,960 billion expected, Rs. 5,124 billion collected (103%). The “Rebuilding Sri Lanka” fund has a Cabinet-approved framework with oversight: Treasury Secretary, senior Presidential Secretariat officials, and others. Forex and rupee accounts are open in Bank of Ceylon and People’s Bank; in-kind donations accepted. Debt management proceeds to targets; the OCC has agreed to a framework for SriLankan Airlines’ debt restructuring.

¶ 09 Our aim is not merely to repair but to build back better. Detailed spending plans will be presented by the Minister of Finance and the Minister in charge of Disaster Management, the President. Thank you.