The Hon. Anura Kumara Dissanayaka

¶ 01 Under the Ministry of Industries, we plan to manage this requirement within the existing allocations of Rs. 1,500 million under Vote 516.

¶ 02 27. Clean Sri Lanka Programme

¶ 03 The Clean Sri Lanka Programme is a major initiative implemented through three pillars—social development, environmental development, and ethical development—to sustainably elevate Sri Lanka and the entire Sri Lankan society. For this, we expect the cooperation of the entire public, the state machinery, volunteers, the private sector including entrepreneurs, national and international NGOs, the Sri Lankan diaspora, international donor agencies, various professionals, and experts.

¶ 04 Under this, we will: - Promote harmony, mutual understanding, and cooperation among different ethnicities, religions, and social groups in Sri Lanka and hold a cultural festival that all communities can enjoy together. - Create facilities for sections of the population with different abilities, who comprise a significant share of our people. - Promote ethics and enhance capacity among service providers in tourism such as three-wheeler and taxi drivers and tourist guides. - Recreate several selected cities with ancient heritage in a way that preserves their unique historical character. - Repair selected under-resourced provincial school buildings; upgrade school equipment and sanitation. - Foster a high-standard early childhood development environment with private sector participation. - Improve sanitation facilities in urban areas; ensure food hygiene; promote road safety; prevent narcotics; manage stray animals; manage solid waste; design coastlines to be attractive and environmentally sustainable; protect watersheds and improve river water quality. - Enhance efficiency in the public service, increase resource productivity, and build a citizen-friendly service by promoting and popularizing the Clean Sri Lanka concept.

¶ 05 This is not merely cleaning or removing vehicle spare parts; it is a broader concept that goes beyond that.

¶ 06 In addition to core partner contributions, we will allocate Rs. 5,000 million from the 2025 Budget.

¶ 07 We all know about road accidents in our country. Over the past five years, 12,000 people have died due to road accidents. About 33,000 have been permanently disabled. Around 40,000 have been injured. Road accidents have become a major national disaster. As a government, as citizens, and across political movements, should we not all focus on road accidents? In the last year alone, 2,321 people died due to road accidents. This is a national calamity that we must defeat. The Clean Sri Lanka Programme includes plans to reduce road accidents, minimize loss of life, and reduce disability. I ask for support from everyone for this. Do not look at this programme through a political lens. View it as a national necessity and a people’s programme.

¶ 08 28. Solid Waste Management

¶ 09 Solid waste management is an escalating issue in many parts of the country. An example is the acute solid waste management problem in the historic city of Anuradhapura. With the growing population, managing waste from the Anuradhapura Teaching Hospital and general hospitals has become challenging and poses threats to public health and the environment. To address this, we propose allocating Rs. 750 million for waste disposal facilities. This initiative will enhance the image of Anuradhapura city, protect the environment, and promote sustainable development.

¶ 10 29. Mitigating Human–Elephant Conflict and Forest Conservation

¶ 11 We have implemented several measures to reduce crop damage, property destruction, and loss of life caused by elephants. These include improving approximately 5,611 km of electric fences and identifying 1,456 km for rehabilitation. We will also procure equipment for setting up protective posts along fences. Further, we will remove invasive plants, better manage grasslands, and improve water sources to enhance elephant habitats. Rs. 300 million has already been set aside in the Budget for this effort.

¶ 12 We have allocated Rs. 100 million to strengthen around 270 field offices—Department of Wildlife Conservation regional offices, protection offices, and others—supporting maintenance of electric fences, vehicles and boats, prevention of wildlife crime, and reduction of human–elephant conflict. Rs. 240 million has been allocated for compensating victims, and the total allocation is increased to Rs. 640 million for HEC mitigation. In addition, Rs. 1,050 million will be allocated to promote natural regeneration and curb deforestation. These funds will support reforestation, forest conservation initiatives, commercial forestry expansion, environmental protection, and mangrove management. Through this, we intend to facilitate eco-tourism, improve wildlife monitoring, reduce forest fires, and prevent forest-related crimes.

¶ 13 30. Sustainable Financing

¶ 14 To nurture a robust ecosystem of Environmental, Social, and Governance (ESG)-based financing, the Government will leverage opportunities in sustainable finance. In coordination with the Ministry of Environment, the Ministry of Finance, and the Central Bank, we will work to access global sustainable finance pools for climate action and related initiatives.

¶ 15 31. Capital Market Development

¶ 16 As Sri Lanka gradually emerges from the economic crisis, activity in the financial sector is normalizing from previously painful conditions. Now is the time to strategically develop the capital market to support real-economy growth, integrating technology with appropriate new products and tools. The Government will proactively undertake measures to encourage institutions to mobilize equity and debt capital for private sector entities and projects.

¶ 17 With policy rates declining, it is vital that small investors have fair access to invest in properly regulated capital market instruments. Through facilitating the use of trust funds, investment funds, and other pooled investment mechanisms, we can fill gaps in the financial market. We will enable innovative and structured products under strong supervision and appropriate safeguards, creating an effective regulatory environment.

¶ 18 32. Governance Reforms

¶ 19 Corruption is a key barrier to economic progress. There is an urgent need, through a collective effort, to address pervasive corruption that hinders sustainable development. Responsibility must be acknowledged not only by public officials but also by private sector individuals and every citizen if they contribute to corruption. We will further strengthen the legal framework to combat corruption. To improve governance, transparency, and accountability, we will expedite the enactment of the Proceeds of Crime legislation and further strengthen CIABOC. We also expect to finalize, after a consultative process, the draft laws relating to proceeds of crime that are currently in preparation.

¶ 20 Accordingly, we will focus on strengthening the laws necessary to minimize fraud and corruption.

¶ 21 33. Sri Lankan Day

¶ 22 The Government’s policy framework “Prosperous Country – Beautiful Life” presents a vision of a harmonious Sri Lanka that bridges community disparities. Therefore, I propose a national festival “Sri Lankan Day,” organized with private sector participation. I expect to allocate Rs. 300 million for this.

¶ 23 We need a Sri Lankan Day that blends Tamil, Muslim, and Sinhala cultures, cuisines, fashion, music, and more. We aim to commence it at the start of the second tourist season this year.

¶ 24 34. Housing for Internally Displaced Persons (IDPs)

¶ 25 With demining and land release, IDPs are being resettled, and refugees are returning to the Northern and Eastern Provinces for post-conflict resettlement. However, basic infrastructure and livelihoods for resettled families remain inadequate.

¶ 26 Accordingly, we propose a multi-pronged approach to address key issues faced by people in the North and East. From the 2025 Budget, we propose to allocate Rs. 1,500 million to meet resettlement needs, expedite the housing programme, and provide essential relief to currently homeless families based on assessed needs.

¶ 27 This proposal came through the Jaffna Coordinating Committee.

¶ 28 35. Essential Repairs to Government-Built High-Rise Housing

¶ 29 Due to lack of maintenance and misuse, many high-rise housing complexes are in poor physical condition, with widespread defects such as façade cracks, spalling, and water leakage. We expect to allocate Rs. 1,000 million for maintenance of high-rise housing complexes built by the central government.

¶ 30 These high-rise schemes must be rehabilitated.

¶ 31 36. Housing for Artists/Media Personnel

¶ 32 With the assistance of the People’s Republic of China, 1,996 housing units are being constructed. Of these, we will allocate a high-rise complex of 108 units at Kottawa–Pelanwatta for artists and media personnel who significantly contribute to our society’s cultural enrichment.

¶ 33 We expect to construct this expeditiously.

¶ 34 37. Drinking Water Sector

¶ 35 - Expedite completion of ongoing large-scale water schemes and community water projects.

¶ 36 Piped drinking water supplied by the National Water Supply and Drainage Board and the Department of Community Water Supply covers about 62% of the population. Recognizing the national importance of ensuring safe water, we will allocate funds to swiftly complete the Gampaha–Attanagalla–Minuwangoda Integrated Water Supply Project; the Aluthgama–Mathugama–Agalawatta Integrated Water Supply Project; the Polgahawela–[correction: Alawwa]–Pothuhera Integrated Water Supply Project; and the Thambuttegama Water Supply Project, which have been delayed due to the economic crisis and suspension of loan facilities by lenders. Within current fiscal space, we estimate a requirement of Rs. 41,234 million over two years.

¶ 37 About Rs. 41,000 million is needed to complete these projects. Accordingly, Rs. 20,000 million has already been included in the 2025 National Budget to complete the above priority projects.

¶ 38 - Expansion of Community Water Supply Programme

¶ 39 This proposal, too, came via the Jaffna Coordinating Committee.

¶ 40 We recognize the need to implement community-based rural water supply schemes especially in rural areas with limited piped coverage. In water-stressed areas, including the North and CKDu-affected regions, expanding fully purified drinking water through community-based schemes is vital to improve rural quality of life. Accordingly, Rs. 2,000 million in the 2025 estimates under the Department of Community Water Supply will be used to complete ongoing schemes and start new ones.

¶ 41 - Restarting the Giribawa–Eppawala Water Scheme

¶ 42 Due to the dry zone conditions in Giribawa and Eppawala (North Central Province), access to quality drinking water is difficult, exposing residents to risks. Recognizing the importance of supplying surface water from Kala Oya—via Kala Wewa and Rajanganaya Wewa—to Giribawa and Eppawala, we propose Rs. 1,000 million to restart preliminary works of the Giribawa–Eppawala water supply project to provide piped water to the area.

¶ 43 38. Filling Essential Vacancies in the Public Service

¶ 44 We have stopped the old practice of filling the public sector with political supporters.

¶ 45 No one will be recruited to the public service based on political affiliations.

¶ 46 In line with the Government’s vision, recruitment, promotions, and transfers in the public sector will be based on qualifications and skills, free from political influence.

¶ 47 Due to challenges from COVID-19, economic downturn, and political instability, a large number of unemployed graduates have emerged.

¶ 48 We identified a significant number of essential vacancies in the public service—many are at the middle layer, necessary to operate the state machinery. Therefore, we will implement a plan to recruit 30,000 to essential vacancies. For 2025, we expect to allocate Rs. 10,000 million for this.

¶ 49 We will not recruit graduates without duties, positions, or a future. We have identified essential vacancies and will recruit 30,000 according to proper procedures. Rs. 10,000 million is allocated for this year.

¶ 50 39. Salary Increase in the Public Sector

¶ 51 A fundamental revision of public sector basic salaries has not occurred for nearly a decade. Considering all factors, the time has come to revise the structure. While ensuring decent living standards for public servants and attracting skilled workers to government, we will implement increases mindful of fiscal constraints.

¶ 52 Accordingly, we propose to raise the minimum monthly basic salary from Rs. 24,250 to Rs. 40,000—an increase of Rs. 15,750.

¶ 53 I noted that some teacher grades currently draw about Rs. 38,000; this will rise to Rs. 61,000. Secretaries to Ministries will see increases of around Rs. 80,000–90,000.

¶ 54 The existing interim and special allowances will be consolidated into the basic salary, and a net increase of Rs. 8,250 will apply to the minimum basic.

¶ 55 This salary increase will also apply to the judiciary, public corporations, statutory boards, university staff, and tri-forces officers.

¶ 56 In addition, we will raise the annual increment scale by 80%. Thus, the Rs. 250 annual increment becomes Rs. 450, and the Rs. 500 increment becomes Rs. 900. Annual increments of all public servants will be adjusted accordingly.

¶ 57 The estimated total cost of this salary increase is Rs. 325 billion. Considering current fiscal constraints, we will implement it in stages. Of the total net increase, Rs. 5,000 plus 30% of the balance will be paid from April 2025; the remaining 70% will be paid in equal parts in January 2026 and January 2027.

¶ 58 Therefore, for 2025, we expect to allocate Rs. 110 billion for the proposed salary increases.

¶ 59 As part of this, ensuring pension benefits under the proposed 2025 structure, pensions of officers retiring on or after 1 January 2025 will be calculated on the new salary structure.

¶ 60 That is, if one retires after 1 January 2025, the pension will align with the full salary increase. There were anomalies in 2015 and 2020, leading to major inequities. For someone with a minimum basic of Rs. 40,000, the staged increase applies, and the pension will reflect that.

¶ 61 When considering increases to public servants’ minimum basic, we will also raise the Disaster Loan ceiling from Rs. 250,000 to Rs. 400,000. Further details are in Technical Note Annex 4.

¶ 62 40. Private Sector Salary Increase

¶ 63 The Employers’ Association has agreed to raise the current minimum monthly wage in the private sector from Rs. 21,000 to Rs. 27,000 from April 2025, and to Rs. 30,000 from 2026.

¶ 64 41. Reconsideration of Estate Workers’ Wages

¶ 65 This issue has arisen; we remain firm. About 1.5 million workers are engaged in tea, rubber, and coconut plantations. The Government’s position is that their living conditions must be improved. In addition to programmes focused on estate development, the Government will ensure and intervene to deliver the currently proposed daily wage of Rs. 1,700. At present it is Rs. 1,350; an increase of Rs. 350 is indicated. We will move accordingly.

¶ 66 42. Public Sector Pensions

¶ 67 We increased pensions by Rs. 3,000 immediately after winning the Presidential election.

¶ 68 As of 31.12.2017, all pensioners are on the same scale; increasing only those who retired in 2016–2020 created disparities. There were court matters; however, justice must be done to them without causing new injustices to earlier retirees. We will resolve this so that the issue does not re-emerge.

¶ 69 Given the longstanding nature and limited fiscal space, we will resolve it in phases. Therefore, for all who retired before 01.01.2020, we propose to align pensions, in three stages, to the 2020 scales under Public Administration Circular 03/2016.

¶ 70 That is, regardless of whether one retired in 1996 or 2016, we will align to the 01.01.2020 scale in three stages.

¶ 71 As the first stage—similar to your earlier increases—we will adjust pensions of all who retired before 01.01.2018 to the third-stage 2018 scales under Circular 03/2016, with effect from July 2025. For this stage, we expect to allocate Rs. 10,000 million in the 2025 Budget.

¶ 72 Then in 2026, we align to 2019; in 2027, to 2020. By 2027, all who retired before 2020 will be on one scale, reducing disparities.

¶ 73 We also propose to implement the fourth and fifth conversion stages of the salary translation for pensions from July 2026 and July 2027 respectively.

¶ 74 43. Legal Reforms

¶ 75 Over the coming year, the Government will introduce a series of legal reforms to establish strong legal frameworks aimed at rapid economic development, good governance, and efficient public service delivery. These include improving SOE governance—through a holding company—creating a legal framework for PPPs, enhancing procurement governance, public finance management, statistics, data sharing, valuation, asset management, microfinance and credit, AML/CFT, and more. Further details are in the Budget.

¶ 76 We intend to amend a large number of laws. The immediate question is, where is the money?

¶ 77 44. Revenue Measures

¶ 78 Sri Lanka’s reform programme is underpinned by revenue-based fiscal consolidation. In 2022, tax revenue fell to 7.3% of GDP—the lowest in the world—driving the crisis.

¶ 79 For 2025, we expect significant revenue from the liberalization of motor vehicle imports effective 01 February 2025. We have already presented this.

¶ 80 We will closely monitor imports to ensure no undue adverse impact on the external sector. Among other measures announced in Parliament in December 2024: we raised the PAYE threshold from Rs. 100,000 to Rs. 150,000 and adjusted the second bracket; removed VAT on fresh milk and yoghurt.

¶ 81 We decided not to implement in 2025 the rent income tax agreed by the previous Government with the IMF.

¶ 82 To recoup forgone revenue, we have already brought to Parliament measures including introducing VAT on digital services, corporate income tax on services exports, and increasing excise on cigarettes/alcohol and on betting/gaming.

¶ 83 These are not sudden new taxes; all were presented in January and early February.

¶ 84 We expect these policies to deliver the revenue needed to reach 15.1% of GDP in 2025. In parallel, we are taking integrated efforts to improve tax administration and compliance.

¶ 85 Notably, last year Customs met its targets; the Inland Revenue Department achieved revenue despite a Rs. 20–30 billion gap; Excise revenue rose significantly. We believe the 15.1% target can be achieved with enhanced performance by Customs, Inland Revenue, and especially Excise. We will provide necessary support; in return, we ask officials to perform their duties to the country.

¶ 86 We will strengthen administration, compliance, digitization, and oversight to enhance fiscal sustainability, while providing relief to the most vulnerable.

¶ 87 We will minimize human interaction in tax administration and digitize systems to reduce leakages and increase transparency.

¶ 88 As part of broader digitization to formalize the economy and enhance revenue collection, Sri Lanka will move towards a cash-and-note-less economy.

¶ 89 We are discussing some tough but necessary decisions that will help the economy, curb corruption, and improve efficiency. Those engaged in corruption or illicit wealth accumulation may be inconvenienced; that is not our concern.

¶ 90 We will implement the use of point-of-sale (POS) machines—especially among VAT-registered businesses—to facilitate digital transactions and reduce cash dependence. A cashless economy will curb evasion and illicit finance, and improve efficiency and stability.

¶ 91 Digitization of revenue-collecting agencies and the economy will significantly aid revenue enhancement. Responsibility does not rest only with tax authorities. Accountants, audit firms, and tax advisors have a social duty to ensure correct taxes are paid to the State.

¶ 92 We will take appropriate steps within regulatory and legal frameworks to ensure compliance. No one should evade taxes. Everyone must pay a fair tax to sustain this society and nation. Every rupee you pay will be safeguarded and deployed for our people and country.

¶ 93 Through these administration and compliance measures, we believe Sri Lanka can exceed revenue targets beyond 2025, enabling further public relief without jeopardizing fiscal and macro stability.

¶ 94 45. Borrowing Limit

¶ 95 For FY 2025, the borrowing limit for the Appropriation Bill is presented in Annex III. Technical notes on expenditures and revenues are set out in Annexes III and IV respectively. Documents required under the State Finance Management Act, No. 44 of 2024, to be presented with the Second Reading, have been tabled.

¶ 96 I request all Hon. Members to study these documents. They reflect where our economy stands and the efforts to transform it. Our economy is in a very difficult place and must be rebuilt from there.

¶ 97 Conclusion

¶ 98 The policies in the Budget proposals I presented today reflect the decisive mandate the people placed on us when we assumed office. These proposals are the result of a collective effort across Government, including many newcomers to Parliament who nonetheless bring significant experience and practical knowledge.

¶ 99 The entire digital chapter was drafted by experts in the field; the Budget document has been prepared accordingly.

¶ 100 We are confident that, for the first time in history, we can contribute to a clean, effective, and compassionate governance.

¶ 101 You will see a team comprising highly diligent and disciplined politicians and eminent professionals who have dedicated their careers and time with families and even business legacies for the country. Together we have embarked on a long, determined journey.

¶ 102 We have reduced the cost of living. We have begun restoring confidence in our justice delivery system.

¶ 103 We must become again a society that believes in our Police, Judiciary, and the Rule of Law. We have begun that.

¶ 104 For the first time, we have not only acted against corruption but also dismantled the intermediary roles at the top of power that facilitated corruption.

¶ 105 For years, those who wanted to invest in Sri Lanka had to unnecessarily go through intermediaries. I tell every investor I meet: you do not need intermediaries; your representative is the BOI. If any official asks for favours, we will not protect them; we will take all independent legal action.

¶ 106 Only under such governance can the country be rebuilt. Those who used to fear acting without paying bribes need not fear now. But those who attempt to solicit bribes must fear. I ask senior officials and politicians to build a society where everyone fears taking bribes.

¶ 107 Our Judiciary has never before been this independent; our Police have never acted with such authority and independence. The Acting IGP has imposed most punishments internally—suspending around 50 officers, including some DIGs and OICs—because if corruption and crime exist within the Police, law and order cannot be protected. Our Police now act lawfully without fear or favour.

¶ 108 Curbing corruption is not just about enforcing justice; it is about modernizing government operations, making the state more efficient and transparent, thereby addressing root causes. We believe the seed of corruption can be uprooted, making bribery increasingly difficult.

¶ 109 Sri Lanka now has a golden opportunity to align with the modern world. I see a unique chance to realize everyone’s aspirations through a united, clean, and prosperous Sri Lanka.

¶ 110 We appeal to overseas Sri Lankans: Though you live abroad, your roots are Sri Lankan. We are proud of your successes in leading institutions worldwide. We understand why your confidence waned; we are grateful for every effort you make to contribute your expertise, skills, and perspectives to our beautiful island. We invite you to return and see how much has changed. Contribute across private, public, or non-profit sectors; join us in shared success.

¶ 111 Last year, our people voted to chart a new path, rebuild the country, and harness the full potential of our citizens. For the first time, all regions—from North to South, East to West—united under a common purpose. Religion, ethnicity, gender, class, and age will no longer divide us. Our people will not be misled by those seeking personal political or private gain by pitting citizens against each other.

¶ 112 Our public officials and appointees share a common purpose, as do the thousands of patriotic public servants working tirelessly to bring change. We will never deviate from our responsibilities and policies. Let us lift Sri Lanka together, prosper together, respect one another, and be proud of this beautiful, sacred island, our motherland.

¶ 113 Finally, I thank the Treasury officials, especially Secretary to the Treasury Mr. Siriwardhana, and all officers who worked tirelessly—often into the early hours and through the night—to finalize and implement the Budget on time for advancing the Government’s economic programme. We look forward to the continued cooperation of Treasury officials.

¶ 114 Thank you all.

¶ 115 Question proposed.

¶ 116 TAMIL TEXT OF THE BUDGET SPEECH - 2025

¶ 117 Preface

¶ 118 Hon. Speaker, I am pleased to present in this Parliament the first Budget of our Government.

¶ 119 After Independence, in 2022 the country faced a severe social, economic, and political crisis. Though it erupted in 2022, the root causes were structural and long-standing. These weaknesses were aggravated by short-sighted governance and poor public financial management. The crisis disrupted normal economic activity across all sectors—from businesses to households. Shortages of fuel, electricity, essentials, food, and medicines caused severe hardships to all, especially women, children, persons with disabilities, and the elderly. People queued for days for basic needs; some even died while waiting. The 2022 crisis was not merely economic; it was a massive failure of political administration and governance, leading to unprecedented suffering. While the initial economic collapse has been largely contained, the 2022 economic crisis has evolved into a humanitarian crisis affecting the poor and most vulnerable.

¶ 120 Beyond the economic and social crises, the events triggered political change. Unbearable hardships and anger against corruption led to widespread unrest; leaders were forced out through mass protests. A caretaker government followed—an act undermining the people’s mandate. Yet aspirations for social, economic, and political change remained unmet, as that interim government largely sought to rescue the corrupt at public expense. The unlawful postponement of the March 2023 local elections revealed democratic deficits. With unwavering commitment, dedication, and leadership, after the Presidential and Parliamentary elections at the end of 2024, a new Government with a strong people’s mandate was formed to transform the economy, society, and politics, and to lead the country towards shared prosperity.

¶ 121 Therefore, this Budget is historic—laying the foundation to fulfill the people’s desire for economic transformation by steering the economy towards stable growth and development.

¶ 122 One of our first challenges was to counter false narratives and malicious campaigns by those seeking to block our mandate—claims that the dollar would shoot to Rs. 400 again, fuel queues would return, international partners would isolate the new Government, investors would lose confidence, and private property would be nationalized. Despite such propaganda, we successfully stabilized the economy, fostered strong relations with international partners and countries, and built investor confidence.

¶ 123 Prices and the fiscal sphere have gradually stabilized; the 1‑year T-bill yield fell to 8.8%, inflation to 4.0% in January 2025; reserves reached USD 6.1 billion by end‑December 2024 after significant debt service; the rupee strengthened to around 300 per USD; and growth is projected at 5% in 2025.

¶ 124 Since mid‑2022, with IMF and partner support, Sri Lanka implemented stabilization reforms—cost-reflective energy pricing, higher taxes, and rate hikes—which burdened the public. While recognizing the IMF EFF’s role, we believe rebuilding the economy requires sovereign control and nationally-led policies.

¶ 125 In December 2024, the debt restructuring concluded. We did not disrupt the process upon assuming office, recognizing time invested and the costs of reversal. The process delivered substantial relief and reduced debt service. The country must use this window to boost non-debt inflows—exports and FDI—to strengthen reserves. Sustained fiscal stability will help smoothly resume capital market debt repayments in future. Consequently, global ratings—Fitch and Moody’s—improved Sri Lanka’s credit ratings by several notches. Investor confidence, trade and investment opportunities, and lower international transaction costs will gradually spur growth.

¶ 126 On the other hand, the crisis continues to affect many, especially the most vulnerable. Inflation reached 70% in 2022, pushing up living costs; price levels remain high though inflation has fallen, while incomes have not kept pace; real wages have dropped, necessitating fair wage increases. We expanded targeted cash assistance under Aswesuma and extended durations; we provide other targeted social benefits. But cash transfers alone cannot eradicate widespread poverty; the state must care for those unable to participate economically while improving targeting and continuously enhancing processes. The sustainable solution is to enable all Sri Lankans to engage fully in economic activity.

¶ 127 Economic growth must be inclusive—broad participation and widespread sharing of benefits. For decades, activity and gains concentrated among a few. In 2019, the top 20% accounted for 47% of household expenditure; Western Province contributed 44% of GDP in 2023. We must democratize the economy—ensure opportunities are more evenly distributed.

¶ 128 This Budget, prepared under stringent constraints, maintains fiscal discipline and strategic direction. The Public Finance Management Act sets a key rule: primary government expenditure capped at 13% of GDP. Within this, we prioritize tax-funded resources to yield maximum social returns. We have funded several key priorities while continuing ongoing initiatives—aligning them to our mandate—evident in increased spending on Aswesuma and social priorities. Despite tight constraints, we allocate from July 2025 an interest subsidy for senior citizens, with strong safeguards to prevent abuse. We set capital expenditure at 4% of GDP—supporting growth through agriculture, MSMEs, transport, rural development, SME revival, local entrepreneurship, research commercialization, and seamless domestic and export production. We will prioritize, target, execute efficiently, and ensure value for money.

¶ 129 As the recovery proceeds, fiscal space will grow through efficiency gains, waste and corruption reduction, better prioritization, and stronger tax administration—enabling us to meet people’s priorities. As a nation, with patience, discipline, and resolve, we will reap the rewards.

¶ 130 Budget principles: expand supply of goods, services, and agriculture; ensure inclusive participation and fair distribution of benefits; safeguard demand-side objectives—continuous supply of essentials at fair prices and acceptable quality—via competitive markets, effective regulation and monitoring, active state participation in select sectors, and targeted state-led production in others.

¶ 131 We will build an economy where people are empowered—by investing in education and training, healthcare, infrastructure, access to markets domestically and abroad, and fair competition without market power distortions. The proposals initiate the people’s economic empowerment, laying the foundation for democratizing the economy. Digitization is essential for sustained productivity growth. Good governance and anti-corruption are equally fundamental—the Clean Sri Lanka Programme gives life to this ideal.

¶ 132 Macro outlook: 5% real growth in the medium term; low, stable inflation via supply-side reforms; a strong external account; rule-based FX policy without disruptive devaluations. We expect exports of goods and services to reach nearly USD 19 billion in 2025. With growth, higher non-debt inflows, and a 2.3% of GDP primary surplus, Sri Lanka will be prepared for rising interest payments from 2028.

¶ 133 World Bank estimates poverty at 25.9% in 2023. Unlike many defaulters that face long periods of high poverty, we expect a reversal from 2025, with this Budget’s proposals forming a comprehensive first step to empower the poor and vulnerable. With fiscal discipline, sound monetary and debt management, human capital investment, a strong safety net, diversification, export promotion, green agriculture modernization, innovation, digitization, a better business climate, PPPs, anti-corruption, improved governance and transparency, and sustainable development measures—we will leverage post-crisis opportunities for lasting stability and prosperity.

¶ 134 I now present the 2025 Budget proposals to Parliament.

¶ 135 [Further Tamil text of detailed proposals continues as tabled.]