The Hon. Chandima Hettiaratchi

¶ 01 Hon. Speaker, I am honoured to deliver my speech while you are presiding.

¶ 02 As we debate the 2026 Budget — at a time when both the 2026 and the 2025 Budgets are under much discussion — I first wish to draw the attention of the House to the historic pattern of revenues and expenditures in Budgets presented by various Governments.

¶ 03 From 2015 onwards, the gap between revenue and expenditure has always been negative. Estimates are made, but reality has fallen well short. In 2022, the Budget deficit was Rs. 2,008 billion. From 2015 through 2023 and 2024, all years recorded deficits. This year, however, we are bringing it into positive territory. Some say this Budget was made by nursery kids, whereas earlier Budgets were made by highly learned, degree-holding gentlemen — the “Kaputa Campus” types, the “Central Bank Robbers and Footnote Brothers”. Those “learned” ones produced negatives; the “nursery kids” produced a positive.

¶ 04 Next, I wish to draw attention to the primary balance — the surplus that remains when you deduct non-interest expenditure from revenue and grants. If it is positive, it is good; if negative, it is problematic. Historically, in 2019, a primary surplus of Rs. 228 billion was estimated, but it ended at a negative Rs. 536 billion. In 2020: negative Rs. 400 billion. In 2021: negative Rs. 1,010 billion. In 2022: negative Rs. 954 billion. In 2023: negative Rs. 895 billion. In 2024, at last, a positive Rs. 650 billion. In 2025, a positive Rs. 1,200 billion — Rs. 120,000 crores. So this year we can report a positive.

¶ 05 Some wept; some struggled; some nit-picked. Earlier, our learned friend Hon. Harsha de Silva said during the Budget: “Who is going to buy vehicles? This is an unachievable target.” But as a professional who understands economics, after the Budget speech he said on the 8th that “we were wrong; the Treasury is cash-surplus.” I appreciate that honesty.

¶ 06 Why is the primary surplus important? Because with a positive primary balance, we can reduce debt, service interest, and create fiscal space for productive expenditure in future Budgets — an important advantage.

¶ 07 On creditworthiness, previously our ratings were at RD (Restricted Default). Now we are moving up from RD through the scale. When the world sees fiscal discipline, it responds; capital returns.

¶ 08 On borrowing costs, if we are seen as high-risk and uncertain, costs rise. With improved macro discipline, costs fall.

¶ 09 From a macroeconomic perspective, the dampening effect on inflation is visible. With reduced pressure, the Central Bank need not be compelled to monetize deficits; when there is a surplus, inflationary pressures moderate.