Hon. (Dr.) Harsha de Silva

¶ 01 Thank you very much for the opportunity, Hon. Deputy Chairperson of Committees.

¶ 02 We are debating the Motion to adjourn on the Fiscal Strategy Statement 2026. I am pleased that Hon. Kaushalya Ariyaratne, representing our Committee on Public Finance, presented this, and Hon. Wijesiri Basnayake seconded it. In Committee, we have intensive discussions on fiscal discipline and public finance. I am happy with the contributions of these two dynamic Members.

¶ 03 At the outset, I note that Hon. Harshana Suriyapperuma, a member of our Committee and former Deputy Minister, has resigned from Parliament and been appointed Secretary to the Ministry of Finance. I will not politicize it. We had strong debates even here in Parliament, but I wish him well. It is a huge responsibility. Former Secretaries, like Mr. Mahinda Siriwardana, worked amid great challenges. We appreciated his service and defended him in this House under heavy attack. Before him, Dr. R.H.S. Samaratunga and others also carried heavy burdens. Mr. Suriyapperuma now has big tasks ahead for the Government, and we in the Opposition will extend cooperation within parliamentary tradition.

¶ 04 Hon. Kaushalya Ariyaratne focused on Prof. Jayati Ghosh. When Prof. Jayati Ghosh and Prof. Martin Guzman visited Sri Lanka, they came to the Pelawatte office; Hon. Anil Jayasinghe, the Minister, and the Secretary were present. The discussion there—now referenced by Hon. Ariyaratne—contrasted the global South–North dynamic: we export raw materials and import finished goods, a system good for neoliberals, they said, but this Government supposedly won’t do that. However, two points they raised must be recalled. At the Sri Lanka Foundation Institute, with a packed audience—I sat in the front row—they said, first, that no country has successfully recovered with the IMF; some in the NPP crowd cheered loudly. Second, they argued much of Sri Lanka’s debt is odious, taken to facilitate corruption; hence, after a debt audit, some of it need not be repaid. Again, loud applause. I even asked someone beside me if he believed this was actually possible; he said yes. We can compare those promises with today’s reality, but I won’t digress now.

¶ 05 The key part of today’s FSS is the Medium-Term Fiscal Framework 2025–2030, on page 5. It projects: last year, growth was 5%; this year, under the JJB Government, it falls to 3.5%; then from next year through 2030, growth averages 3.1%. Under their four-year transitional programme, from 2026 they foresee at most 3.1% growth.

¶ 06 My fundamental concern: you cannot develop this country on 3.1% growth. Dr. W.A. Wijewardena recently said we need at least 8% to even get close to our aspirations. If the Government has truly changed its perspective per Ghosh or Guzman, these numbers would be different. Earlier they criticized low growth targets; now they cut from 5% to 3.5%, then to 3.1%. If the system has changed and billions in FDI are coming, why no higher growth?

¶ 07 Add to that, the MTFF caps primary expenditure (non-debt-service spending) at 13% of GDP. Even if revenue rises, per the IMF Agreement signed by Hon. Anil Jayasinghe as Acting Finance Minister, the Government commits to spend only 13% on primary expenditure. Without capital expenditure, how do you reach 8–9% growth? That is why we are stuck around 3%. The solution is to bring in domestic and foreign investment, which requires significant economic reforms—that’s the catch.

¶ 08 We were told, for the first time, Rs. 1,400 billion will be allocated for capital expenditure. The President himself said so. But when we asked in the Committee on Public Finance, after five months only about Rs. 160 billion had been spent; even if we assume Rs. 400 billion now, how do you get to Rs. 1,400 billion? Where is the bottleneck? How do we fix it? Regarding private investment, Hon. Sunil Handunnetti said USD 650 million came in the first quarter; the President’s Office said, “No, where did USD 4.7 billion come in?” In fact, only around USD 80 million actually came; 11 agreements were signed, projecting about USD 80 million for Q1. Based on earlier signed agreements, around USD 203 million is recorded as inflows. Where did USD 4.7 billion come from? The BOI Chairman says USD 4.7 billion is proposed projects; the largest is a refinery, which reportedly has several issues.

¶ 09 As an example, today the Hon. Deputy Speaker tabled the Supreme Court Determination on the Sri Lanka Electricity (Amendment) Bill—29 pages. For the first time, the World Bank, ADB and JICA jointly wrote to Hon. (Eng.) Kumara Jayakody, warning that the proposed amendments could constrain investment into the power sector. They raised four concerns, including whether maintaining 100% state ownership over generation, transmission and distribution companies is appropriate—for instance, splitting hydro (like Mahaweli), coal, thermal, etc., and keeping hydro permanently 100% state-owned.

¶ 10 Hon. Deputy Chairperson of Committees

¶ 11 Hon. Member, you have two more minutes.