The Hon. Nishantha Jayaweera - Deputy Minister of Economic Development

¶ 01 Hon. Deputy Speaker, it is gratifying even to hear the Opposition acknowledge the economy is now more stable as we debate our Government’s second Budget. Let me place recent fiscal history on record:

¶ 02 - 2019: Budget deficit estimated at Rs. 685 billion; actual ballooned to Rs. 1,439 billion (about 9 percent of GDP) due to poor management. - 2020: Estimated overall deficit Rs. 1.2 trillion; actual Rs. 1.6 trillion (deficit about 10.7 percent of GDP). - 2021: Estimated Rs. 1.5 trillion; actual around Rs. 2 trillion (about 11.7 percent of GDP). - 2022: Estimated Rs. 1.6 trillion; actual about Rs. 2.4 trillion (about 10.2 percent of GDP). - 2023: About 8.3 percent deficit. - 2024: Estimated Rs. 2.4 trillion; the new Government contained it to about Rs. 2.2 trillion (around 6.8 percent of GDP). - 2025: Initially expected deficit at 6.7 percent of GDP; through fiscal discipline it has been reduced to around 4.5 percent.

¶ 03 On revenue performance: - 2019: Budgeted Rs. 2.3 trillion; actual Rs. 1.8 trillion. - 2020: Budgeted Rs. 1.5 trillion; actual Rs. 1.3 trillion. - 2021: Budgeted Rs. 1.9 trillion; actual Rs. 1.4 trillion. - 2022: Budgeted Rs. 2.2 trillion; actual about Rs. 2.0 trillion. - 2023: Budgeted Rs. 3.4 trillion; actual about Rs. 3.0 trillion. - 2024: Budgeted Rs. 4.1 trillion; we are on track to approach it. - 2025: Parliament approved Rs. 4.9 trillion; we have exceeded it—heading toward around Rs. 5.2 trillion. For the first time in recent history, actual revenue will surpass the Budget target.

¶ 04 Key enablers are strengthened revenue administration, fiscal discipline, cash and debt management, and coherent fiscal policy. The Inland Revenue, Customs, and Excise—together responsible for over 93 percent of revenue—have each exceeded monthly targets for the first time.

¶ 05 The primary balance has improved from a deficit of 0.8 (2024) to a surplus of about 2.5 percent in 2025. With a stabilized economy, faster growth requires: - Higher exports (already rising compared to 2024), - Increased worker remittances (now higher than last year), - Stronger tourism earnings (2025 likely the best year so far), - More FDI (legal and institutional facilitation provided in this Budget), - And higher public capital expenditure (we target over 70 percent execution this year, compared to 50–55 percent in many past years, despite late Budget approval and intervening elections).

¶ 06 On tax relief: in our first Budget we raised the monthly personal income tax threshold from Rs. 100,000 to Rs. 150,000, with our Manifesto committing to further, gradual increases. We continue to prioritize broad-based development, restarting key infrastructure: next phases of the Central Expressway, a new expressway from Kurunegala to Dambulla, and resumption of the airport’s second terminal works, among others. Funds are also provided for the second tranche of the public sector pay rise and for property loans to public servants.

¶ 07 This is a scientific, balanced Budget, designed so benefits flow equitably across the country while lifting growth. I urge the House to approve it.