Hon. Sunil Handunnetti - Minister of Industry and Entrepreneurship Development

¶ 01 Hon. Speaker, I am pleased to express my views during our Government’s second Budget Debate.

¶ 02 Let me begin with two sayings. A Russian proverb says, “Vaska the cat listens but keeps eating.” Another saying goes, “Never try to wake those who pretend to sleep.” I will explain why these apply here.

¶ 03 During this Budget debate, several key Opposition criticisms have been repeated. One is that the Government is collecting revenue and filling the Treasury through taxes but not distributing benefits to the people. Another is that Government MPs are buying vehicles. I even saw someone outside Parliament say at a media briefing that while stopping vehicle permits for professionals, the Government plans to give 11,750 vehicles to NPP cadres. They also claim that this 2026 Budget will bring in a property tax in 2027. What is clear is that the Opposition has little to say about the direction and objectives of this Budget.

¶ 04 As usual, they also allege we drafted the Budget to the IMF’s wishes. The reality is that every government that has worked with the IMF has followed its recommendations to some degree — previous governments included. What you failed to do was to implement IMF recommendations and agreed reforms in a way that served the people’s welfare. Not because you opposed them — none of you resigned claiming you did — but because you lacked mechanisms, management, and above all, discipline.

¶ 05 Hon. Speaker, the most important elements in managing an economy are fiscal discipline and economic democracy. You only spoke about them; we implemented them. We carried out the agreed reforms and used them for the people’s benefit. Within one year, President Anura Kumara Dissanayake and the Cabinet did what you could not: stabilize this economy. That is what matters.

¶ 06 What are we doing now? Instead of privatizing or selling off state enterprises as you attempted, we are managing them properly to return them to profitability. That is not a bad thing — whether the idea is from the IMF or from us. We are cleaning up losses, waste, and corruption in state enterprises. We have rationalized taxes; tax rationalization is not inherently bad.

¶ 07 On state enterprises, in lieu of privatization, the Treasury has assumed the legacy debt service of 10 entities to free those institutions from that burden — including Lanka Sugar Company (Pvt) Ltd. under my Ministry. You said no one would buy SriLankan Airlines even for one rupee. Instead of listing to sell, this Budget allocates USD 174 million to retire its debt and free it. Is that wrong? If, instead of privatizing, we restructure and develop SriLankan Airlines under the State, is that bad? Whether proposed by the IMF or originating here, it is not inherently wrong.

¶ 08 We are also clearing guarantees given to state enterprises — again, not a bad step. You would have done it too, but you could not.

¶ 09 This Budget also proposes digitalization of state institutions. It may not be perfect yet, but we propose it; many MPs have welcomed it.

¶ 10 On taxes, instead of the old pattern — hike cigarette and alcohol taxes, raise gas and fuel prices, increase electricity tariffs — we broadened the tax base. By 30 September 2025, registered taxpaying members increased by 300,000 compared to 2024. Expanding the number who should pay and do pay is not a bad thing.

¶ 11 We reduced the VAT registration threshold from Rs. 60 million to Rs. 36 million from April 2026, adjusting bands appropriately. Everyone accepts we need revenue for our development journey. VAT applied reasonably collects to the State what is already priced into goods. You too would have taken it — you just could not implement it. Today, with the people’s mandate, we do.

¶ 12 We are implementing a national tariff policy. Is a national tariff policy wrong? We removed the cess on imported fabric and applied VAT instead to create a level playing field and protect domestic producers. If the Opposition has objections, state them now; we are implementing these proposals.

¶ 13 We increased revenue from 2024 to 2025 not by inventing new taxes, but by improving tax efficiency by Rs. 900 billion, motivating taxpayers, strengthening systems, and improving the business environment. Now you say, “Spend if you collected.” We will spend — not to polish any Minister’s image — but according to proper plans.

¶ 14 What predominates in this Budget? Protecting revenue and spending prudently. In 2026 we will make significant allocations for feasibility studies — because we have no mandate to spend without due diligence.

¶ 15 President Anura Dissanayake stated clearly in the Budget Speech (p. 568): “On this path, we do not hear the shrill cries of enemies; we see only the determined, hopeful eyes of our citizens.” That is why I cited the Russian proverb: like Vaska the cat who keeps eating despite the noise, our journey continues despite distractions.

¶ 16 We allocate Rs. 342,000 million for expressway widening and the national road network, including Kadawatha–Meerigama, Rambukkana–Galagedara, and Kurunegala–Dambulla expressways. We will prepay next year’s debt where prudent to free funds and accelerate works like Rambukkana–Galagedara. Expressways inject new life into the economy; we can debate past mismanagement of earlier expressways separately.

¶ 17 On energy, we are piloting green hydrogen and other expansions aligned to our development plan.

¶ 18 Significant funds are allocated for urban flood control in Batticaloa, Matara, Colombo, and Kolonnawa. Without flood resilience, investors will not come and industries cannot function.

¶ 19 We allocate Rs. 85,700 million for drinking water facilities. You ask us to spend; we are spending — Rs. 342,000 million on roads, Rs. 85,700 million on water — for development. For public transport, Rs. 67,200 million is planned for the 12 months ahead.

¶ 20 Regarding cabs and procurement timing: we are using savings from this year; there is no bar on spending this year’s balances. The Opposition lacks this experience — you never ended a year with savings. We are also reusing underutilized buildings and lands across the country in a planned manner. For rural roads, Rs. 24,000 million; for rural bridges, Rs. 2,500 million have been allocated.

¶ 21 Under my Ministry alone, Rs. 120 billion is allocated for industry: Rs. 19 billion for industrial promotion; Rs. 55 billion for MSMEs; Rs. 7.6 billion for workforce development; Rs. 3.1 billion for tourism facilities; Rs. 0.7 billion for trade facilitation; and Rs. 29.5 billion for postal services. For SMEs specifically, we have set aside Rs. 80 billion in credit — the largest SME allocation in Sri Lankan history — effective next year. From January, new businesses, new industries, exporters, and agro-industries nationwide will have access to these unified facilities — an integrated development plan.

¶ 22 Last year we stabilized the economy; this year we begin the forward journey. You claim we have abandoned JVP/NPP policies, veering right, “neo-liberal,” or alternatively centralizing everything into a one-party state — even calling the President “Hitler.” These contradictions show a lack of understanding of our economic path.

¶ 23 Hon. Minister, you have only two more minutes.

¶ 24 I will conclude, Hon. Speaker.

¶ 25 We have allocated Rs. 53 billion for a sustainable life — including accessibility for persons with disabilities. Even street dogs: Rs. 100 million is allocated to address the severe stray dog problem in cities like Colombo and to establish shelters. This is a humane Budget — not just for people but even considerate towards animals and wildlife.

¶ 26 On sugar: beyond brown sugar, we launched outlets to promote kithul treacle, jaggery, and kithul-based products. Thanks to social media, I am now called the “Father of Brown Sugar,” which I take over being the “Father of White Sugar,” because from 2020 over five years we imported 2.502 million metric tons of white sugar at a cost exceeding USD 1,500 million — roughly 80 percent of half the IMF facility — draining foreign exchange. Promoting brown sugar conserves forex and supports healthier lives. To the medical MPs here, which do you endorse — brown sugar or white? Even in the Parliamentary canteen, what should we recommend? We are distributing affordable brown sugar through the SATHOSA network nationwide. I thank the media for helping popularize it.

¶ 27 Finally, the President concluded his speech with: “Grant us the serenity to accept what cannot be changed, the courage to change what can be changed, and the wisdom to know the difference.” We understand that reality. We will calmly accept what cannot be changed, and with courage change what can be changed, guided by wisdom. This is the first victory Budget on our forward path. I conclude with that emphasis.

¶ 28 Thank you, Hon. Speaker.