The Hon. Chathuranga Abeysinghe - Deputy Minister of Industry and Entrepreneurship Development

¶ 01 Hon. Deputy Chairperson of Committees, presenting the “Fiscal Strategy Statement - 2026” is a good undertaking by any Government. It is particularly important for Sri Lanka. As we embark on economic reforms to repair the economy that those on the Opposition benches destroyed when they governed, this is a crucial policy charter on fiscal discipline, fiscal policy, and transparency.

¶ 02 When advancing an economy, three policies matter: fiscal policy, monetary policy, and external sector policy. Under the IMF programme, the country has agreed upon a stabilization framework, and this Government clearly stated even before the election that we will operate within that IMF Agreement and proceed along that path.

¶ 03 Within one year, we presented multiple laws to Parliament, including the Central Bank independence law and the State Finance Management law. If those in the Opposition—now sitting up front—had previously shown any interest in managing public finances, our country would not have fallen into this abyss. Now they lecture us on what to do.

¶ 04 Having been defeated politically and having bankrupted the country economically, they now tell the National People’s Power (NPP) Government how to fix the economy. The international community has already assessed, over the past 6–8 months, how successfully this Government has moved the economy forward.

¶ 05 Opposition “economic experts” predicted debt restructuring would fail and push Sri Lanka into crisis last December. But on December 28 we succeeded. They then predicted we would fail to meet people’s expectations and would be expelled from the IMF framework when presenting the Budget. Yet the NPP successfully managed expenditures, remained within the framework, and presented a Budget that allocated funds for people and development. They also said the IMF review would fail; ultimately, they are left giving us advice on things they themselves failed to do.

¶ 06 Let me remind the “experts” of 2015–2019: they now give a very narrow account of the causes of the crisis, but the real fault lies with four decades of a neoliberal model. We all say the 2019 Gotabaya Rajapaksa Government cut taxes and lost revenue, but those “experts” could not broaden the tax net. Had they broadened it, this crisis would not have struck so hard. Other countries collect 20–26% of GDP in taxes; Sri Lanka collected only around 13%—then it was cut to around 8.5%, destroying the Budget. Now when we expand the base, do not instruct us; we are doing what you failed to do.

¶ 07 You failed to prioritize expenditures towards development and human upliftment, to curb corruption and waste. Do not shout now and give advice. It was your 6–8% ISB borrowings that bankrupted the country. Evidence shows those loans were not for repayment but were consumed, and many were rolled over between 2015 and 2019. Growth fell to around 2.5%, and now you question stabilization and capital spending. It was your mismanagement that pushed the economy over the edge.

¶ 08 We know leaks from corruption and irregularities undermined the Budget. Since we strengthened CIABOC, past and present corruption cases are moving; about five individuals a week now appear before the law. You could not stop the Government’s leakage; we are implementing fiscal discipline through process and culture change.

¶ 09 Managing a budget is not only legal frameworks; it requires a political culture. Even private entities forecast, audit, and operate within a governance culture to achieve their budgets. We in the NPP have the competence and will to achieve our targets.

¶ 10 Some ask how we will achieve these targets. This framework is about getting out of crisis, stabilizing the economy, and beginning a growth path with a realistic growth projection of 3.2% to 3.5% initially, rising thereafter. When growth moves from 3.2% to 3.5% to 4.8% and beyond, that is good for the country.

¶ 11 On revenue, instead of repeatedly raising VAT and income tax on those already paying, we will broaden the base. Through asset declarations and wealth orders, individuals must declare wealth and demonstrate the income source with proportional tax file coverage. With anti-corruption and digitalization, including closing VAT leakages, we are confident we can move toward 18–20% revenue-to-GDP like other countries. From 2015–2018, VAT leakage was 40–60%; they could not fix it with technology. We will.

¶ 12 This Statement is a three-year forecast within a four-year macro framework with risks; detailed measures are in the first Budget. We will prioritize spending towards digital tech, education, health, Northern and Eastern development, ports, and PPPs—areas they neglected.

¶ 13 On FDI, the President clearly stated there are proposals exceeding USD 4 billion; BOI shows proposals exceeding USD 3 billion and around USD 650 million already confirmed within this period, including expansions and new projects. Countries are exploring G2G investments with us due to restored confidence, though credit ratings and some banks’ lending constraints mean it will take some time. Crucially, investors are not complaining that ministers are demanding commissions; that culture has ended.

¶ 14 We are establishing coherent national policies where none existed—for fisheries as an export-oriented sector, for coconut (targeting LKR 2 billion exports within two years while allowing temporary imports of intermediates), for minerals, gems and jewellery, agriculture, and importantly land. We will publish available land tranches for tourism, industry, agriculture, and aquaculture to end the practice of chasing officials for years to secure approvals.

¶ 15 On SOEs, those “experts” could not restructure even one SOE between 2015–2019. Their plan was to run them into losses and privatize to allies, as seen in past aircraft procurements. We are pursuing restructuring that protects the public interest and Treasury, consolidating about 112 entities and retaining strategic national assets. The state enterprise sector remains vital globally for development, market failure, and national security contexts. The neoliberal model is over. We will use state, private, cooperative, and market organization together to rebuild the economy.

¶ 16 Therefore, stop destructive propaganda that deters investment. Watch the data: GDP, exports, inflation, interest rates, and private capital expansion. If there are adverse deviations, let’s debate. Do not undermine the country with misinformation. Thank you.