The Hon. Anura Kumara Dissanayaka

¶ 01 For initial preparations at the Examination Yard and the Bloemendhal Goods Services Supply Park, we propose to allocate Rs. 500 million in the 2025 Budget to enable government participation.

¶ 02 Port congestion cannot be resolved by ad hoc responses to momentary problems. We need a long-term solution, and this Budget presents the foundational infrastructure required for that long-term solution.

¶ 03 As a long-term measure to decongest container truck traffic within and around the Colombo Port and to increase value addition and foreign earnings, I propose to establish at Chetiyagoda an Internal Container Dry Port (ICD) as a rail-based Integrated Multimodal Cargo and Logistics Center (IMCLC). For institutional structuring, land acquisition, and other initial preparations, we propose Rs. 500 million.

¶ 04 We need a National Single Window, a Truck Appointment System, an electronic Container Tracking System, and a Port Community System. We had such systems in a previous era, but they no longer suit the present. Therefore, we propose Rs. 500 million to support upgrading these systems.

¶ 05 We are planning to push the economy to its maximum potential leveraging the Port.

¶ 06 To improve cargo flows, upgrading infrastructure and integrating cutting-edge technology is critical. Outdated scanning systems cause delays across the entire supply chain. Mr. Speaker, the era of working by merely “looking and sniffing” is over. Therefore, we allocate Rs. 1,000 million to support the initial development and installation of advanced scanning systems for the Colombo Port and Bandaranaike International Airport.

¶ 07 4. Digital economy acceleration

¶ 08 Accelerating Sri Lanka’s digital economy is a key pillar of our economic development strategy. Through improving productivity across industry and services, promoting economic opportunity, enhancing public service delivery, and strengthening transparency in public finance and governance, digital transformation will drive growth.

¶ 09 A Universal Digital Identification for all citizens—Sri Lanka Universal Digital ID (SL‑UDI)—is a priority. SL‑UDI is a core Digital Public Infrastructure (DPI) necessary for a digital economy. We have discussed a digital ID since 2012, yet we have not delivered. We intend to complete this rapidly as the foundational layer of digitalization. Initial steps have commenced, and we will expedite the process.

¶ 10 Trust in the security and integrity of digital services and systems, by the public and institutions, is critical to success and sustainability. We will govern and safeguard the digital economy with new laws and strengthened existing statutes, including on cybersecurity, data privacy, and data protection. Many fear bringing their data and activities into digital systems; we will provide robust assurances on security.

¶ 11 We will strengthen the institutional framework, including empowering a high-level Digital Economy Authority and related agencies. We will also accelerate digital payments as a core element of the digital framework across government, businesses, and citizens—for example through the recently launched GovPay. We must gradually move away from a cash-based economy—carefully, with clear communication and phased steps—without disrupting existing economic balances. We will enact the necessary laws swiftly while minimizing cash usage prudently.

¶ 12 We will create an enabling environment to attract private capital and entrepreneurship across all digital sectors, helping draw FDI for AI, robotics, fintech, and other emerging technologies.

¶ 13 Our target is to grow Sri Lanka’s digital economy to exceed USD 15 billion within the next five years and to over 12 percent of GDP. To this end, the Government will facilitate growing the ICT/BPM export revenue to USD 5 billion.

¶ 14 Accordingly, in addition to currently earmarked funds, we propose to allocate Rs. 3,000 million to accelerate digital economy development.

¶ 15 5. Tourism

¶ 16 Rather than focusing only on arrivals, we must focus on value creation from tourism. We will develop domestic destination management—building facilities and unique cultural value propositions with local destination branding—so each destination generates value.

¶ 17 We expect more than 2.5 million tourists this year. However, they cluster at a few destinations, risking severe overcrowding—for example, if entry to Yala takes two hours, it harms the sector. We must introduce new destinations. We will identify them and prioritize essential infrastructure over 2025–2026.

¶ 18 Examples: Anuradhapura, Yapahuwa, Panduwasnuwara, and Jaffna are not yet positioned as tourism destinations though they are historically significant. We need to create branded destination cities and products to capture benefits.

¶ 19 We will support destination infrastructure with an integrated urban naming and promotion program, allocating Rs. 500 million in 2025.

¶ 20 We will train youth in communication and other skills for the sector. Expanding destination capacity is a top priority, including introducing a digital ticketing system to address overcrowding. One should not have to buy a ticket from Colombo to visit Sigiriya—we will digitize this. We also recognize BIA’s capacity constraints; Phase II should have been completed in 2023, but delays occurred as Japan suspended concessionary lending. With Japanese institutional participation, we will restart Bandaranaike International Airport Phase II swiftly; agreement has been reached and preparatory work is done with the support of the Minister of Aviation.

¶ 21 We will enhance tourist safety and facilitation via a technology-based integration of Tourist Police, state institutions, and civil organizations—providing destination information, safety alerts, feedback, and complaint monitoring.

¶ 22 As numbers grow, risks to tourist safety rise; we will address this proactively.

¶ 23 6. SMEs: The backbone of economic development

¶ 24 Developing SMEs and entrepreneurship is a prime Government objective. Access to finance has long been a critical bottleneck for SMEs and rural enterprises. They have capability and desire but struggle with startup capital. The financial culture is collateral-heavy, excluding many. Banks must protect depositors and uphold prudent lending, but solutions are needed for SMEs and startups.

¶ 25 As a first step, we will operationalize a development banking function through the existing state banking machinery under a new governance structure, supported by the National Credit Guarantee Institution (NCGI) to expand guarantee-backed lending. We have engaged state banks and received positive responses endorsing this development lending initiative.

¶ 26 7. Fostering innovation and entrepreneurship

¶ 27 In collaboration with research institutes, universities, state entities, the private sector, and the National Intellectual Property Office (NIPO), we will align R&D projects with industry needs. Priority R&D areas will be supported, including: - Co-funding selected R&D initiatives (researchers and Government both contribute). - Connecting Sri Lankan researchers globally with state R&D bodies and universities. - Acceding to the Madrid Protocol to help exporters secure global trademark protection.

¶ 28 In 2020, 272 patents were registered, of which 223 were non-resident registrations. In 2019, Sri Lanka ranked around 61st by patent applications. Many research findings remain uncommercialized, missing economic benefits and investment opportunities. We need a strong central institutional mechanism to govern research institutions and bring commercially viable research to market.

¶ 29 We propose Rs. 1,000 million to establish an Innovation and New Products Fund to commercialize research outcomes.

¶ 30 8. Public expenditure management

¶ 31 We continue to rationalize public spending, reviewing allowances and benefits to public representatives. The Rs. 1 million insurance cover is reduced back to Rs. 250,000 (the 2023 level). To set an example, the Cabinet is limited to 21 Ministers; Ministers’ and State Ministers’ expenses have been rationalized. We have no right to waste even a cent of the people’s money.

¶ 32 We have appointed a committee to optimize public assets such as residences set aside for the President, Prime Minister, and Ministers, to use them efficiently for public needs and economically viable projects. One former ministerial residence has already been assigned to the Anti-Corruption Office due to space needs. We will repurpose such buildings for public benefit and the economy.

¶ 33 Luxury vehicles incurring high running costs will be auctioned in March. We delayed auctions until the vehicle import Gazette is issued to avoid market distortions; auctions will follow.

¶ 34 Reducing Government vehicle costs: Many official vehicles are old with high maintenance. We will minimize costs by providing selected officers with suitable monetary allowances; amounts will be finalized after discussions with unions. MPs will not receive vehicle permits or new vehicles this year; the budget cannot sustain it.

¶ 35 Public institutions: The state machinery has grown unwieldy without proper studies or rationale, causing duplication and waste. A committee under the Secretary to the Prime Minister has been set up to review institutions—their functions, efficiency, potential mergers, closures, mandate changes, and reorganizations—and to recommend actions to improve service delivery and prevent wastage.

¶ 36 State-owned enterprises (SOEs): To reduce fiscal risk and improve efficiency, we will establish a holding company to own and govern selected SOEs with strengthened governance, financial discipline, and operational efficiency.

¶ 37 9. Supporting women’s economic participation

¶ 38 There are ongoing central and provincial programs, including monthly nutritional assistance for pregnant mothers—Rs. 7,500 has been allocated. Rs. 5,000 million is allocated for the Thriposha program for mothers and children’s nutrition. Rs. 120 million is allocated for programs to prevent violence against women and children, empower women, and protect women. Rs. 720 million is provided to maintain the nationwide office network implementing women-focused programs.

¶ 39 10. Towards a healthier society

¶ 40 Sri Lanka’s health system is relatively under-digitalized in the region. From 2025, we will introduce new initiatives to digitize health service delivery, including digitizing functions at the National Medicines Regulatory Authority (NMRA) and the State Pharmaceuticals Corporation (SPC), and enhancing the “Suwastha” system.

¶ 41 We will strengthen primary care by upgrading services in over 1,000 PMCUs and district hospitals, emphasizing NCD control and prevention, and roll out geriatric and eldercare services in selected PMCUs in every district, supported by human resource reorganization.

¶ 42 We will accelerate PPP engagement with Regional Plantation Companies to strengthen estate health services—providing staff, equipment, and medicines to estate hospitals.

¶ 43 We will enhance pandemic preparedness and response capacity over the next three years with development partners, including surveillance and early warning for future health threats.

¶ 44 We increase the 2025 health allocation to Rs. 604 billion—about USD 2 billion. We allocate Rs. 185 billion for medicines and medical supplies. There should be no drug shortages given this provision; if shortages occur, they are due to process issues we expect the Health Minister to resolve. We will ensure quality procurement, distribution, and full utilization of funds, minimizing waste.

¶ 45 Neurodevelopmental disorders including autism have increased. We will implement a five-year national program across all 25 districts to improve health, education, and other services for affected children. As a first step, we allocate Rs. 200 million in 2025 to establish an internationally-standardized treatment unit for children with neurodevelopmental disorders at Lady Ridgeway Hospital, and plan to establish such centers in every district over the next five years.

¶ 46 We allocate Rs. 250 million to develop a model preschool/daycare center for children with autism and other neurodevelopmental conditions, addressing gaps in inclusive early childhood education and teacher/caregiver capacity. The Government will establish the model; the private sector can follow.

¶ 47 11. Education for all

¶ 48 Due to the economic crisis, there has been no rehabilitation or development of school infrastructure since 2019. Therefore, we allocate over Rs. 10,000 million in 2025 to upgrade school infrastructure. For quality enhancement in the university system, Rs. 7,000 million has been allocated.

¶ 49 Preschool nutrition: We will increase the per-meal payment from Rs. 60 to Rs. 100 under the morning meal program, allocating Rs. 1,000 million in 2025. We will allocate Rs. 80 million to develop selected early childhood centers.

¶ 50 Recognizing preschool teachers as key human capital developers, we will increase their allowance by Rs. 1,000 per month from June this year, with Rs. 100 million allocated.

¶ 51 Modernizing school education: Our policy is to develop a primary school within a 3 km radius of residences. Of 10,126 state schools, about 3,946 are primary schools with 634,094 students; over 3,000 schools have fewer than 100 students; 1,471 schools have fewer than 50 students—mostly in rural and difficult areas—causing inequities. We will allocate Rs. 500 million to conduct a national review and prepare a relocation and rationalization plan. In 2016, 138 schools had zero intake and 137 had only two students enrolled—underscoring the need for rationalization.

¶ 52 Scholarships and allowances: - Grade 5 Scholarship for low-income families: increase from Rs. 750 to Rs. 1,500; Rs. 1,000 million allocated. - Sports schools’ monthly nutrition allowance: increase from Rs. 5,000 to Rs. 10,000; funds already provided in 2025. - TVET student monthly allowance: increase from Rs. 4,000 to Rs. 5,000; funds provided plus an additional Rs. 200 million. - University Mahapola: increase from Rs. 5,000 to Rs. 7,500; other university scholarship allowance from Rs. 4,000 to Rs. 6,500; Rs. 4,600 million allocated. All payments effective from April 2025, post‑Budget approval.

¶ 53 Overseas scholarships for high-performing A/L students from underprivileged backgrounds to pursue top-ranked bachelor’s degrees abroad, with a program to bring them back to serve Sri Lanka; Rs. 200 million allocated in 2025.

¶ 54 Sports schools: We will develop specialized sports schools in five provinces—Western, Northern, Central, Uva, and North Central—allocating Rs. 500 million.

¶ 55 Libraries in Jaffna and other areas: The burning of the Jaffna Library in 1981 was a national tragedy. Many readers, including schoolchildren and island communities, rely on it, but facilities remain inadequate. We allocate Rs. 100 million to provide ICT and related facilities to the Jaffna Library and Rs. 200 million to upgrade other libraries.

¶ 56 12. Energy

¶ 57 Energy is critical to growth. We will diversify energy sources and modernize infrastructure, encouraging domestic and foreign investment based on least-cost tariffs. We expect Parliament to pass the amended Electricity Act swiftly, prioritizing the regulatory framework needed for CEB internal restructuring.

¶ 58 Recently, a 50 MW wind project was awarded at 4.65 US cents per kWh—the lowest ever in Sri Lanka across renewables. In such a context, awarding at 8.26 US cents cannot be justified. We will base investments on least cost, regardless of the company or country, to benefit consumers and industry.

¶ 59 Of 99 tanks (10,000 MT each) at the Trincomalee Oil Tank Farm, some are with CPC and IOC; 61 remain. Given location advantages, we aim to develop the remaining tanks through a joint venture with internationally recognized entities, enabling CPC to access the international fuel market.

¶ 60 13. Agriculture and food security

¶ 61 Agriculture employs about 30 percent of the workforce and anchors the rural economy. Our policy is to raise productivity, competitiveness, and resilience. We will continue fertilizer support to paddy farmers, allocating Rs. 35,000 million for 2025, increasing the subsidy from Rs. 15,000 to Rs. 25,000.

¶ 62 We will prioritize quality seed development, water-efficient irrigation management, and efficient water use in agriculture.

¶ 63 Strategic buffer stocks: Paddy price instability and rice market distortions require state intervention. From Maha 2024/25, we will maintain adequate buffer stocks. We allocate Rs. 5,000 million for paddy purchases this season. With state bank support, the Paddy Marketing Board can leverage stocks to raise additional financing. We consider maintaining rice buffer stocks a top priority.

¶ 64 Data systems: The sector lacks timely, reliable data across the value chain. With ADB’s Food Security and Livelihood Emergency Assistance Project and later with the World Bank’s Integrated Rural–Urban Development and Climate Resilience Project, we will establish an updated data and information system from production to consumer to enable informed decisions.

¶ 65 Other crops: We will intensify production of pulses and other crops—peanuts, undu (black gram), chillies, red onions, cowpea, soya, millet, potatoes, and selected tubers—via a 2025–2027 accelerated program, allocating an additional Rs. 500 million in 2025 beyond existing provisions.

¶ 66 We will introduce a regulatory framework for aggregation and storage of paddy and rice by amending the Paddy Marketing Board Act to confer regulatory powers.

¶ 67 Land for production: We will identify underutilized estates/lands managed by the Land Reform Commission (LRC), Regional Plantation Companies (RPCs), National Livestock Development Board (NLDB), Sri Lanka State Plantations Corporation (SLSPC), and Janatha Estates Development Board (JEDB), and channel suitable tracts to private investments including SMEs. As a first step, we allocate Rs. 250 million for assessments and preparatory work.

¶ 68 Producer cooperatives and youth entrepreneurship: We will promote cooperative producer models, drawing on global examples (Fonterra, Amul, Mondragón), providing land, extension, and support, strengthening the legal framework, and allocate Rs. 100 million in 2025. We will allocate Rs. 500 million to support youth-led agri-SMEs/startups.

¶ 69 Dairy: Domestic milk meets only ~45 percent of demand. To raise output, improve value chains and farm productivity through ongoing linkage projects; we allocate Rs. 2,500 million for 2025–2026.

¶ 70 Irrigation: With about 75 percent of the rural population in agri-based livelihoods, we allocate Rs. 78,000 million in 2025 for irrigation. Rice is a national product; with such investment, harvests cannot be left to private monopolies; hence buffer stocks and legal safeguards are essential. We will prioritize medium-term water resource projects—Malwathu Oya, Gin Oya, Nilwala, Maduru Oya South Bank, and Mundeni Aru—and rehabilitate downstream systems of ancient schemes such as Gal Oya, Rajanganaya, Minneriya, and Hurulu Wewa. We allocate Rs. 2,000 million in 2025 for downstream rehabilitation, reflecting institutional absorption capacity.

¶ 71 14. Plantations and other export crops

¶ 72 Coconut: Global demand is rising; by 2030, total nut requirement is projected at 4.5 billion—1.8 billion for household consumption and 2.7 billion for industry—while current production is about 3.0 billion. Based on Coconut Research Institute recommendations, we will develop 16,000 acres in the Northern “Coconut Triangle” by providing high-yield seedlings and land development support; Rs. 500 million allocated.

¶ 73 Spices and traditional exports: We will enhance value addition for cinnamon and others, with better marketing via diplomatic missions, quality upgrades, and international partnerships. We allocate Rs. 250 million for integrated product and trade promotion for cinnamon and other exports.

¶ 74 15. Fisheries and aquaculture

¶ 75 Limited access to freshwater prawn seed constrains freshwater prawn farming and non-traditional aquaculture. Under a PPP model with fisher groups/cooperatives and local communities, we will establish freshwater prawn hatcheries, producer cooperatives, and marketing networks, enabling linkage to markets; Rs. 200 million allocated.

¶ 76 16. Social protection

¶ 77 Aging, low female labor force participation, and labor market frictions create challenges, with inequalities affecting children, low-income women, elders, the poor, and persons with disabilities. We consider protecting and empowering them a core duty, integrating them as productive members of society.

¶ 78 “Aswesuma” enhancement: We will increase net spending on social protection to Rs. 232.5 billion in 2025. Monthly benefits increase from Rs. 8,500 to Rs. 10,000 for the poor and from Rs. 15,000 to Rs. 17,500 for the extreme poor effective January 2025. Transitional benefits set to end on March 31, 2025 will be extended to April 30, 2025. We expect to include around 280,000 additional eligible families through a new selection round concluding in May 2025.

¶ 79 Kidney patients and persons with disabilities: Monthly allowance will increase from Rs. 7,500 to Rs. 10,000. Elders’ allowance will increase from Rs. 3,000 to Rs. 5,000 from April 2025.

¶ 80 Empowerment from “Aswesuma”: A pilot to economically empower 25,000 beneficiary families is underway with ADB and World Bank support. We will gradually expand empowerment to capable families using domestic funds, increasing allocations by Rs. 500 million.

¶ 81 We have already provided Rs. 6,000 per eligible low-income child for school books and supplies. For fisheries livelihoods, Rs. 3,000 million has been provided for kerosene support from October 2024 to March 2025.

¶ 82 Children in probation, certified schools, remand, and childcare institutions: There are 379 such institutions (47 state-run) with inadequate facilities and safety. We will allocate Rs. 500 million to improve capacity—both physical and human resources.

¶ 83 We will establish child-friendly transport for institutionalized children to and from courts to avoid transporting them with hardened offenders; Rs. 250 million is allocated in 2025 to procure suitable vehicles.

¶ 84 We will provide broader social protection and housing for orphaned children so they can live dignified, secure lives—offering sustained support, skills development, and safety to enable economic participation.

¶ 85 Specific measures: 1. Children in state institutions and remand homes will receive a monthly Rs. 5,000—Rs. 2,000 deposited to the child’s account and Rs. 3,000 to the legal guardian for expenses. Rs. 1,000 million allocated in 2025.

¶ 86 2. Many lack family support post-institutionalization, delaying marriage and causing social and economic stress due to lack of housing. We will provide a Rs. 1 million housing grant when such institutionalized youths marry. Rs. 1,000 million allocated in 2025.

¶ 87 3. We will ensure access for institutionalized children to the nearest national or provincial school with adequate facilities, amending necessary regulations to address lack of address documentation.

¶ 88 4. For rehabilitating youths in state centers, we will adopt pathways to deliver quality TVET (NVQ 3/4) and develop a process for Police/GS clearances that do not unduly bar re-employment for those with good conduct post‑release. We will top up existing TVET funding by Rs. 100 million.

¶ 89 5. Upon turning 18, institutionalized youths—especially females—will receive priority, based on merit, in state housing assistance, training, and recruitment. We will amend laws to allow extended stay in institutions under conditions where there is no safe reintegration option, to prevent exploitation.

¶ 90 Disability data system: We will allocate Rs. 100 million in 2025 to establish a comprehensive database on persons with disabilities under the relevant Secretariat, in collaboration with the Department of Census and Statistics.

¶ 91 Disaster relief: Ex gratia for deaths and full disability due to disasters or wild animals will increase from Rs. 250,000 to Rs. 1,000,000. A scheme to provide up to Rs. 2.5 million per affected facility for children’s homes, elders’ homes, and disability institutions is introduced.

¶ 92 Mental health: We have seen tragic suicides among schoolchildren; youth mental health is a serious social issue. We allocate Rs. 250 million in 2025 for a medium-term program by the Health Ministry with the Education Ministry to expand awareness and counseling for students and adolescents.

¶ 93 Assistive devices: Recognizing their critical role, we will allocate Rs. 500 million in 2025 to expand domestic production of assistive devices—initially upgrading facilities at the Ragama Rheumatology and Rehabilitation Hospital as a national center and establishing regional production centers.

¶ 94 Festival food support: To ease living costs, we will provide an essential dry-ration package (rice, tinned fish, dhal, onions, potatoes, dried fish, etc.) at concessionary prices for the upcoming New Year through Lanka Sathosa, allocating Rs. 1,000 million.