Hon. (Dr.) Harshana Suriyapperuma - Deputy Minister of Finance and Planning

¶ 01 Hon. Deputy Speaker, I answer on behalf of the Minister of Finance, Planning and Economic Development.

¶ 02 (a) (i) The IMF Executive Board approved a 48‑month Extended Fund Facility programme, and the first tranche amounting to approximately USD 330 million was disbursed on 20th March, 2023. Necessary processes were initiated and agreements prepared in that regard.

¶ 03 (ii) Implementation of programme prior actions and recommendations has placed some pressure on the public. Salient among these are tax reforms, increases in utility tariffs, and targeting social assistance to eligible groups. These arose from the severe 2022 economic crisis and policy missteps over many years. At a time when the economy had collapsed and debt was unsustainable, people faced severe hardship. The current programme was designed to exit that situation within a timeframe. Recognizing hardships, the present Government has prepared measures to soften the rough edges of conditionalities and provide greater relief.

¶ 04 Already, the PAYE tax-free threshold has been raised from Rs. 100,000 to Rs. 150,000. To improve child nutrition, VAT exemptions on eggs and other selected domestic value-added products have been prepared. The export service levy rate agreed by the previous Government at 30 per cent has been reduced to 15 per cent. A Rs. 6,000 allowance per school-going child in economically vulnerable families has been rolled out, with most beneficiaries already paid; those excluded from Aswesuma due to system gaps are being covered. The fertilizer subsidy has been increased up to Rs. 25,000 from mid‑2024. For the fisheries community, a kerosene subsidy of Rs. 15 to Rs. 25 per litre has been arranged, and for multi‑day boats a diesel subsidy up to Rs. 300,000 has been provided. While not sufficient to offset all hardships, these are an initial step.

¶ 05 (iii) The above adjustments and measures address the concerns. Going forward, we are committed to reviews and calibrations, within an enabling environment, to extend relief further where feasible.

¶ 06 (iv) We are strengthening and expanding the social safety net to protect the vulnerable. Unlike previously, where even allocated funds were not disbursed, the new Government expedited disbursements to the most distressed. We have introduced targeted assistance for essential needs, are reassessing policies to balance fiscal responsibility with public welfare, and are reviewing complaints under Aswesuma to include eligible but non‑beneficiary households. The 2025 allocation for Aswesuma has been increased to Rs. 232.5 billion, higher than in 2024. Our aim is to minimize unnecessary hardship while building a more resilient economy in which people can participate productively.

¶ 07 (b) Does not arise.

¶ 08 A detailed written answer has been placed in the Library.