The Hon. Dinesh Hemantha

¶ 01 Hon. Presiding Member, since Independence, regardless of whether the model was socialist, neo-liberal, or a mixed social-market approach, the end result we were handed by 2024—when the National People’s Power Government assumed office—was a bankrupt country. The celebrated models touted by today’s Opposition culminated in bankruptcy.

¶ 02 To exit bankruptcy, we must halt the fall in real GDP. If real GDP falls by around 2–4 percent for two consecutive quarters, it is recession; if by over 10 percent for a longer period, it is depression. When we took office, the economy was contracted. We crafted this inaugural Budget within a long-term plan to lift the fallen economy as much as feasible in 2025.

¶ 03 From the expenditure approach to GDP—private consumption, Government consumption, gross investment, and net exports—we raised public sector wages (teachers, doctors, engineers, office staff, all public servants) to stimulate demand. We also increased allowances like Samurdhi and pensions, and broadened basic relief, to bolster private consumption. As demand rises, supply must adjust; hence production must increase. As production grows, unemployment falls and employment rises, enabling us to provide 35,000 jobs without padding the public service with meaningless posts.

¶ 04 We need a stable macroeconomic environment—domestic and foreign investors require stability. Wage hikes and public spending cannot be done at levels the economy cannot bear; otherwise inflation surges. A key indicator of macro stability is single-digit, mid-level inflation. Therefore wage hikes were phased, mindful of inflation, to keep it in single digits so investors can see predictable future returns.

¶ 05 Rice price was a hot topic: we are accused of promising to buy paddy at Rs. 154–155 per kilo but paying Rs. 120. If we could pay Rs. 520, we would, because we care for the farmer. But paying Rs. 120 for paddy—after milling—implies rice would reach Rs. 230 per kilo, which is unfair to consumers. Therefore we set a fair current price of Rs. 120 per kilo for paddy, balancing farmer and consumer welfare. Not all paddy will be bought by the State under the floor price; only any surplus supply gets absorbed. Private buyers may purchase at higher prices, but retail rice must be below Rs. 230 per kilo. If our stocks fall short, we have planned a three-month buffer stock via imports to stabilize prices. To those who created monopolies, we say: we will take steps to break monopoly pricing.

¶ 06 On our economic model: critics ask if it is socialist, capitalist, liberal, or social-market. We say it ensures economic and democratic freedoms suited to our nation. Like in cricket, where until 2009 batsmen scored only playing forward, Sri Lanka’s T.M. Dilshan introduced the “Dilscoop” with a backward hit. New thinking is permissible. We have built a new model to end 76 years of recurring failures and lift the country to a higher plateau—with the resolve of 159 MPs and a volunteer force. We have the strength to reach the final goal. Thank you for the time.