The Hon. (Dr.) Najith Indika

¶ 01 The value is slightly above 60 percent. Although we presented our first Budget in March, and despite that situation, according to current statistics and the Ministry of Finance charts, we expect to bring that value close to 70 percent by end-December. Considering the period since March when we brought the first Budget this year, that is a significant success. Therefore, we need not fear our expenditure management. It is happening properly and in the right manner.

¶ 02 Madam Deputy Chairperson of Committees, when the Hon. President presented the Budget, he stated our Budget’s objective. We brought our Government’s first Budget in March this year. A few months later, now, we have had to bring our Government’s second Budget. The aim of that first Budget was to provide additional relief to the people who were amidst severe hardships at that time and, at the same moment, to jump-start their household economies. We were not in the place of telling people, as Ranil Wickremesinghe said, to tighten belts and wait until 2048 to rebuild the country. The country must be rebuilt, the economy must be rebuilt, but people must be able to live. Our people should not pay the price for the sins and negligence of those who governed; our children should not pay with malnutrition. Therefore, while taking the basic measures for macroeconomic stabilization, we prioritized relief as much as possible.

¶ 03 In line with that policy, we implemented the largest public sector salary increase in history—40 percent. Consequently, private sector wages also rose. Accordingly, allocations increased for school meals and many other needs. We enhanced disability allowances, elderly allowances, unemployment benefits and other social protection programs.

¶ 04 This Budget, which follows that first phase, is what we call a development Budget. As discussed over the past days, we believe economic stabilization has taken hold to a reasonable extent. Now we must take the country in a growth-oriented direction we could not reach for a long time. Accordingly, the Hon. President presented six core strategic objectives: inclusive and sustainable economic growth, higher incomes through export diversification, ensuring debt sustainability, strengthening the productive economy, eradicating rural poverty, and promoting digitization. While lifting the economy through digitization, export development, and the productive economy, we must also eradicate poverty and build an economy that benefits all—a socialized, people-bonded development model. The foremost task is to achieve debt sustainability. That is the biggest economic step our Government has taken at this time.

¶ 05 Madam Deputy Chairperson of Committees, recall what many said about this Government regarding debt sustainability and growth. Before the election, they claimed if we came to power, businesses would collapse, their businesses would fail, and we could not engage internationally. But in this period, we have shown that we have done what those who governed for decades could not. There was a debt crisis. Every Government borrows; every country has debt in its Budgets. But a debt crisis—being trapped in a debt spiral—is different. Until now, we were trapped in such a vicious cycle. As the Hon. President highlighted, we were in a vicious cycle regarding debt.

¶ 06 We kept borrowing more in each Budget; then the next year’s interest installments rose, forcing us to borrow even more. The deficit between revenue and expenditure widened, reaching about Rs. 5,100 billion in revenue versus Rs. 7,100 billion in expenditure. Our biggest achievement this year is reversing that vicious cycle—turning it around. Thus, in the 2025 Budget, the projected revenue of Rs. 5,100 billion and expenditure of Rs. 7,190 billion are moving in a direction where the gap can be narrowed.

¶ 07 We have increased revenue and reduced expenditure, thereby cutting the Budget deficit. Usually, every year actual expenditure exceeds estimates. We curtailed that, increasing the primary surplus. That means next year’s interest burden reduces, and consequently the next Budget’s deficit and borrowing needs reduce. Instead of a widening vicious cycle, we have steered back toward normalcy in our first year. That is a victory that gives hope to our economy. Even the IMF projected Sri Lanka’s debt-to-GDP ratio at 115 percent in 2022 and expected it to reach 95 percent by 2032. We have already brought it down to 95 percent, and we believe by 2032 it can be 87 percent.

¶ 08 In 2023, domestic interest as a share of revenue was about 80 percent; by 2025 we will bring it to 52 percent, and it will decline further thereafter.

¶ 09 Those who previously set fire to the Treasury now complain, asking “Why keep a trillion rupees idle in the Treasury?” The fact is, no one before amassed such balances; instead, successive years overspent through supplementary estimates. Now, everyone asks about the “trillion.” Indeed, a large sum is there—raised from our people’s revenues. We did not raise taxes after coming in. In the past year, what new taxes did we impose? In fact, we removed VAT on several items, raised the PAYE threshold from Rs. 1,000,000 to Rs. 1,500,000 per annum. We accept the need to go further, but within the IMF program and as a country that defaulted, we acted prudently. We improved Government and State efficiency, raised revenue, increased customs and excise collections, and tourism earnings. As Hon. Harsha de Silva acknowledged, the Treasury surplus reflects that discipline. We appreciate his honesty.

¶ 10 The Opposition Leader said even a Montessori child could do this. If so, why didn’t they do it then? From 2015 to 2019, when they governed, the economy’s decline laid the groundwork for bankruptcy. They borrowed from private bondholders, raised the debt burden, and slowed growth. If university students could easily do it, why couldn’t they? We have delivered within a year.

¶ 11 Why do Treasury balances matter? Because stronger cash balances lower borrowing needs and interest costs. When you lack cash, you borrow at “fire-sale” rates. This is not idle money; it’s financial discipline. We reduced borrowing needs: when we said we would borrow Rs. 4,000 billion, we actually borrowed Rs. 3,740 billion, and next year even less. That is discipline—something parties lacking internal discipline cannot build for the country. We have taken serious steps on debt sustainability and fiscal discipline.

¶ 12 Two issues often arise: vehicle imports and MPs’ vehicles. First, the claim we allocated Rs. 12,500 million for MPs’ vehicles was false. That allocation was for about 2,700 essential vehicles and equipment for Government, including the Ministry of Health and livelihood services; when clarified, that story faded. Now they talk about MP vehicles and “permits”. The President and our policy platform are clear: no tradable MP vehicle permits. If senior public officers have official vehicles for duty, why cannot MPs? But not for resale or private luxury. We included this in page 194 of our policy manifesto before the Presidential Election. We stand by it.

¶ 13 Regarding estate workers’ wages: when the President announced increasing their daily wage—from Rs. 200 paid by companies plus Rs. 200 by the Government to raise it to Rs. 1,750—many were pleased. This community has lived in hardship for nearly 200 years, bringing in dollars and adding value without receiving commensurate benefits. Any humane person should welcome this. Yet I saw some SJB Members on TV and social media objecting to the Government paying Rs. 200. That is wrong. As a special segment deserving support, they must be assisted.

¶ 14 Please do not turn this into a nationalist issue. No one objects when farmers receive fertilizer subsidies or fishermen get fuel subsidies. Do not object to Government support for estate workers. Accept and support this step taken for them. Do not undermine it.

¶ 15 Thank you.