The Hon. Chathuranga Abeysinghe - Deputy Minister of Industry and Entrepreneurship Development

¶ 01 Hon. Chairman, today we debate two Heads crucial to recalibrating Sri Lanka’s economy. Whether our economy remains at USD 100 billion or grows to USD 200–250 billion over the next decade will be determined by these two Heads.

¶ 02 On the digital economy: While the world moved ahead using digitalization to make economies and industries efficient, harnessing data science for decision-making and ensuring transparency to curb corruption, our Opposition kept Sri Lanka in a primitive state, resisting digitalization that would have exposed corruption in COPE and COPA. With this new journey, digitalization and the digital economy are central pillars.

¶ 03 Some entrepreneurs think business is merely profit-making and imagine that political power can be pursued similarly. Politics too is entrepreneurship—but those political entrepreneurs should study how the NPP identified a market gap and built a team to outperform all competitors and win power. Before lecturing on national or economic entrepreneurship, first win a local authority.

¶ 04 Industry has moved past the Fourth Industrial Revolution and towards a fifth. Value is now created within digital supply networks and chains. Past administrations failed to empower our industrialists to plug into these networks. We are now laying that foundation. Previously, we warned that without digitalization we would be irrelevant to markets; now, beyond relevance, digital innovation is disrupting markets and displacing incumbents. Understanding the difference between digitization (analogue to digital conversion) and digital transformation (re-engineering systems, people and processes using digital tech) is essential.

¶ 05 Sri Lanka’s digital services industry hovers around USD 1.6 billion, having stagnated after reaching about USD 1.2 billion earlier, growing too slowly versus peers. To raise our share of global value creation, this Budget focuses on workforce, infrastructure and strategic positioning. We have advantages in digital services beyond BPO—higher value functions, FinTech, cloud computing and cybersecurity. The Budget outlines major initiatives to support and attract firms in these fields and to build Sri Lanka’s brand as a digital solutions hub.

¶ 06 We lacked a proper startup ecosystem. This Budget addresses core gaps: an initial Rs. 300 million, followed by a Fund of Funds with IFC, to catalyze venture investment; building an angel network and attracting high-net-worth investors; structured coaching, space and infrastructure for startups via public–private collaboration.

¶ 07 We are creating digital nomad visas and developing IT districts/cities to attract freelancers and foreign knowledge workers who operate from Sri Lanka. Local freelancers lacked recognition and access to finance; through a registration framework and banking integration, dollar earners will gain access to private credit. We are in dialogue with banks and improving connectivity and infrastructure to promote freelancing.

¶ 08 On the digital services tax, we have clarified that it brings net benefits; industry practitioners now understand its limited impact. Internationally, we are partnering with India and Singapore to adopt proven technologies rapidly; we do not have time to reinvent.

¶ 09 We will also drive digital transformation across traditional industries that have limited data, low productivity and little access to value chains. The Ministries of Industry and Digital Economy are preparing a joint programme to move beyond Industry 4.0 into practical transformation in agriculture, fisheries and light manufacturing. National productivity systems will be upgraded through the National Productivity Secretariat, focusing on People, Process, and Technology.

¶ 10 Ease of Doing Business will improve through accelerated digitalization. We will expand the tax net through digital tools while supporting SMEs, ensuring a fair, level playing field for all – from the smallest to multinationals – through transparency enabled by digital systems.

¶ 11 Three institutions are already advancing innovation to support digitalization. This is the best, most concrete plan we have seen to propel digital industries and opportunities for our youth. Let us unite to implement it swiftly and build a USD 200 billion economy. I urge support for these Budget Heads. Thank you.