The Hon. Ravi Karunanayake

¶ 01 Hon. Presiding Member, I appreciate the opportunity to speak while you are in the Chair. I wish to say a few words on this Budget. If this is the JVP-led NPP’s first Budget, I may be mistaken, because there was an interim Budget presented months earlier. You travelled the world, spoke with countries and with the IMF, and now you know what needs to be done. The question now is whether you will do what you told the people, or just complete what previous governments began. I am pleased that President Anura Dissanayake is taking forward UNP policies in a policy-consistent manner. As Finance Minister in 2015 I began certain things; after 2022, Ranil Wickremesinghe began others after default. Continuing these with fiscal discipline is welcome. Since Hon. Wasantha Samarasinghe is here, I say this.

¶ 02 J.R. Jayewardene introduced the open economy. It was criticized, but today there is no better path. Instead of an anti-private sector, anti-western approach, we should, where there are shortcomings, correct and move forward amicably, because the world recognizes the open economy. Look at America. Your Government’s concept papers note “There is institutional corruption still in the country” and that approvals take time. I believe you must pursue the open economy and correct its gaps to draw more investment. Whatever is said, investments have not yet come. You cite USD 700–800 million, but those are pipeline or reinvested flows.

¶ 03 Managing an economy is not ad hoc. It has four parts: the real economy (private and public sectors), fiscal policy (yours to manage), balance of payments, and the financial sector—now independent under the Central Bank. The implications will be seen in time.

¶ 04 In this Budget’s first Schedule, Rs. 4,485 billion are for expenditures and Rs. 4,495 billion for past debt and capital repayments—nearly Rs. 9 trillion to pay. Against expected revenue of Rs. 5,355 billion, there is a Rs. 3.74 trillion gap. You present an apparent surplus of one trillion. If so, why borrow another Rs. 1,757 billion in 2026? That “surplus” is a liquidity buffer, not free cash. With money printing halted, you have built a buffer—an approach that began under Ranil Wickremesinghe. In 2024 it was about Rs. 600 billion, growing since. But there is an opportunity cost: at, say, a 10 percent cost of capital for Government, holding Rs. 300 billion costs Rs. 30 billion annually. Therefore, I urge you: the Government needs not idle surpluses but to lower interest rates and borrow at 6–8 percent to invest in projects that yield 15–20 percent returns. That is development. Money sitting in a bank does not develop a country; it yields no progress.

¶ 05 When the President spoke in Parliament, the dollar was Rs. 301; today it is Rs. 306.75. In eight days, a Rs. 5 depreciation adds to the debt stock. On USD 38 billion, each Rs. 5 adds roughly Rs. 200 billion to the debt stock; at 10 percent interest, that is Rs. 20 billion more interest in just eight days. Managing an economy is not casual. We need investments.

¶ 06 Nominal allocations are falling in real terms. For example, Agriculture rises from Rs. 217 billion (2025) to Rs. 221 billion (2026), a nominal 1.8 percent—real decline. Similar in Transport and Civil Aviation, and Housing (from Rs. 104 billion to Rs. 103 billion), and also in Education and Health. IMF limits spending to about 13 percent of GDP, hence the squeeze; therefore we must grow revenue and prioritize capital spending that generates future income. Idle cash does not create fiscal discipline; it has opportunity cost while you borrow at 10 percent.

¶ 07 Also, instead of blaming 76 years, read page 3 of the Central Bank’s 2024 report: inflation was falling; deflation at 1.2; policy rates down to 8; exchange at 293—this was in 2024 before you took over. Acknowledge that honestly. We value fiscal discipline carried forward by President Ranil Wickremesinghe, which President Anura Dissanayake now advances.

¶ 08 But fiscal discipline must be pro-growth. There are 422 SOEs; only 52 are profitable. In 2022, total loss was Rs. 774 billion; in 2023, after default, they posted Rs. 428 billion profit; in 2024, Rs. 485 billion profit; in the first months of 2025, Rs. 227 billion. Now that is slowing. How can a “no-corruption” Government earn less profit than “corrupt” ones? CEB made Rs. 88 billion profit in 2024; by Q2 this year, only Rs. 13 billion. We are not calling you thieves; we want the economy to grow. Historically, most development occurred under UNP-led periods. I am happy that many of you—Lal Kantha, Wasantha Samarasinghe, Bimal, Vijitha Herath—are now aligning to the correct path. You have reduced luxury—fewer vehicles, fewer advisers, no foreign junkets—yet recurrent expenditure is up 7 percent in 2025. What is the formula?

¶ 09 On SriLankan Airlines, we said Rs. 20 billion will not fix it—not out of malice but practicality. We need privatization/strategic partnership with a strong airline. You cannot run this on petty cash. In 2023–24 it made Rs. 2,970 million profit; in 2024–25 it made a Rs. 7,950 million loss. After your “clean” Government came, how is it loss-making? The truth is politicization.

¶ 10 On debt, total public debt was Rs. 28 trillion in Sept 2024; now Rs. 33 trillion. External public debt was USD 32.5 billion; now around USD 37 billion. We know increases were for stabilization, but call it what it is. Governing is not easy.

¶ 11 On price controls, when the Hon. Minister took Trade, we warned: do not fix maximum prices across the board—let competition work, or today’s smiles will become tears tomorrow.

¶ 12 On reserves, despite claims of surplus forex, “The Morning” of 11 Nov 2025 reports: “Sri Lanka’s official reserve assets recorded a marginal dip in October… gross official reserves provisionally at USD 6,216 million at end-October.” If reserves dip, you cannot claim a forex surplus while spending dollars and earning rupees. When Hon. Ranil Wickremesinghe left, reserves were USD 6,485 million (25 Sept last year); after 13 months, USD 6,220 million. The issue is not the independent Central Bank; it is the cause of your problem if policy is misaligned. The IMF cares less about forex growth; they risk perpetuating poverty. Take their prescription, but do your own diagnosis and what’s best for Sri Lanka.

¶ 13 We must target stability via exports, investments, productivity, equity, education, health, poverty eradication, and protecting the vulnerable. You came as a party of the underprivileged; today you drift. Build an economy where 30 percent can shop even in small supermarkets sustainably—but stock market indices crossing 23,500 is not broad development; many profits are undertaxed. The 30 percent who voted for you must be uplifted. There is nothing here on cost of living reduction—unlike in 2015 when we showed a plan to reduce prices of 15 items over four years. There is no pathway for youth protection. Seniors once earned 15–16 percent on deposits; by 2018 it was 10 percent. Poverty is now over 25 percent. You allocate Rs. 500 million for housing and property loans for 1.6 million public servants—divided, that reaches very few. You tout Rs. 1 million houses—but at 500 sq ft, even at Rs. 4,000 per sq ft, numbers don’t align.

¶ 14 Break monopolies in cement, steel, tiles, aluminium, bathware; prices would fall by up to 65 percent. Compared to India, Thailand, Malaysia, monopolistic trade here pushes prices up.

¶ 15 Airlines’ embarkation levies: SriLankan owes Rs. 27.58 billion. Government brings in tourists, but SriLankan, FitsAir, AirAsia, Aeroflot, and Air India have not remitted levies to the Civil Aviation Authority. Collect these dues.

¶ 16 On education, while you speak of reforms, I received a UGC circular (3 Dec 2024) to Vice-Chancellors stating: do not increase university allocations by even five percent for five years and do not change policies—this contradicts reform rhetoric. We welcome genuine education reform and merit-based public recruitment.

¶ 17 Finally, remember the expressway you protested years ago: had it been built then, cost would have been about Rs. 158 billion; now it is around Rs. 357 billion.