Hon. Anura Kumara Dissanayake

¶ 01 ...through networks, programs targeting women will be implemented at a cost of Rs. 720 million.

¶ 02 10. Towards a healthy society

¶ 03 (i) Digitalization of the health system

¶ 04 Compared to other countries in the region, digitalization in Sri Lanka’s health system remains limited. Accordingly, from 2025, new initiatives will be undertaken to enhance digitalization in health care delivery. This will include digitizing the operations of the National Medicines Regulatory Authority and the State Pharmaceuticals Corporation, and improving and expanding the “Swastha” system.

¶ 05 (ii) Improving primary health care services at the rural level

¶ 06 Focusing on communicable disease control and prevention, efforts are underway to improve service delivery in over 1,000 primary medical care units and divisional hospitals. Further, in selected primary medical care units in each district, disease prevention and elder-care services will be provided, targeting especially the elderly population.

¶ 07 (iii) Plantation health services

¶ 08 Public–private partnerships (PPPs) with plantation companies will be pursued to strengthen health services at estate level. The Government will provide the necessary human resources, essential equipment, and medicines required for estate hospitals.

¶ 09 (iv) Pandemic preparedness

¶ 10 Over the next three years, with support from development partners, the national capacity for disease prevention, preparedness, and response will be strengthened. In addition, surveillance and early warning capabilities against all potential health hazards will be enhanced.

¶ 11 (v) Health treatment for children with neurodevelopmental disorders including autism

¶ 12 Over the past decade, the number of children with neurodevelopmental disorders, including autism, has increased in Sri Lanka. To address this, a five-year national program is proposed to enhance health, education, and service facilities for children with neurodevelopmental disorders including autism, across all 25 districts. As an initial step, I propose to allocate Rs. 200 million in 2025 to establish at Lady Ridgeway Hospital for Children a treatment center for neurodevelopmental disorders that meets international standards. Further, within the next five years, similar centers will be established in each district with the necessary human resources.

¶ 13 (vi) Inclusive early childhood development centers for children with neurodevelopmental disorders including autism

¶ 14 Currently, preschools and day-care services are largely provided by the private sector. However, preschools and day-care facilities for children with autism are limited, primarily due to a lack of awareness and adequate capacity among preschool teachers and caregivers on inclusive education and early childhood development for such children. For this purpose, we propose to allocate Rs. 250 million to establish a model day-care center.

¶ 15 11. Education opportunities for all

¶ 16 Due to the unprecedented economic situation in the country, since 2019 there has been no improvement of school infrastructure facilities. Therefore, more than Rs. 10,000 million has already been allocated in the 2025 Budget to improve school infrastructure. Rs. 137,000 million has already been allocated to improve the quality of universities.

¶ 17 (i) Nutrition program for preschool children

¶ 18 I propose to increase the per-child payment for the preschool breakfast program from Rs. 60 to Rs. 100. Rs. 1,000 million has already been allocated in the 2025 Budget estimates for this purpose. Rs. 80 million has been allocated for the development of selected early childhood education centers.

¶ 19 Recognizing the key role of human resource development, and to improve the quality of preschool education and honor their service, we propose to increase from June this year the current allowance paid to preschool teachers by an additional Rs. 1,000. Rs. 100 million will be allocated for this.

¶ 20 (ii) Modernizing school education

¶ 21 Government policy is to develop a primary school within a 3-kilometre radius of where children live or their parents work. There are currently 10,126 government schools island-wide, of which 3,946 are primary schools. About 634,094 students study in these schools. More than 3,000 schools have fewer than 100 students, and 1,471 schools have fewer than 50 students, most of which are in disadvantaged rural areas. This has led to large disparities among schools. Therefore, I propose to allocate Rs. 500 million to review the current school system and prepare a national plan for consolidation and rationalization.

¶ 22 (iii) Student scholarships

¶ 23 - I propose to increase the monthly scholarship for students from low-income families who pass the Grade 5 Scholarship Examination from Rs. 750 to Rs. 1,500. Rs. 1,000 million is allocated for this. - To support sports students in obtaining nutritious food, I propose to increase the monthly nutrition allowance from Rs. 5,000 to Rs. 10,000. The allocation for this is already included in the Budget estimates. - I propose to increase the monthly stipend paid to students studying in vocational training institutes from Rs. 4,000 to Rs. 5,000. Additionally, I propose to provide a further Rs. 200 million over and above the allocation already provided in the 2025 Budget estimates. - I propose to increase the Mahapola scholarship from Rs. 5,000 to Rs. 7,500 and the monthly allowance from Rs. 4,000 to Rs. 6,500. Rs. 4,600 million has already been allocated for this in the 2025 Budget estimates.

¶ 24 All these payments will be effective from April 2025.

¶ 25 (iv) Scholarships for undergraduate studies at top universities

¶ 26 Many talented Sri Lankan students who obtain excellent results at the G.C.E. Advanced Level Examination possess the capability to study at internationally recognized top universities. I propose to establish a scholarship scheme for students to complete undergraduate degrees at top universities and return to serve the country. I propose to allocate Rs. 200 million in 2025 to commence this program.

¶ 27 (v) Development of sports schools

¶ 28 I propose to establish special sports schools in five provinces: Western, Northern, Central, Uva, and North Central. Accordingly, I propose to allocate Rs. 500 million to develop sports schools in these provinces.

¶ 29 (vi) Jaffna Library and other regional libraries

¶ 30 The Jaffna Library is used by a large number of readers, including schoolchildren from Jaffna and the nearby islands. However, infrastructure has not been adequately improved for these readers. Therefore, we propose to allocate Rs. 100 million in this Budget to provide computers and other essential facilities to this library. Further, we propose to allocate another Rs. 200 million under this Budget for the development of other regional libraries.

¶ 31 12. Energy sector

¶ 32 The energy sector plays a crucial role in Sri Lanka’s economic growth. Greater emphasis will be placed on renewable energy, diversification of energy sources, and modernization of infrastructure. Sri Lanka will welcome the best local and foreign investors capable of providing cost advantages to the country, while the Government will continue to invest. Necessary reforms to the regulatory framework that facilitate restructuring will be prioritized, and new legislation will be finalized soon.

¶ 33 With technological advances in wind power reducing production costs, recent purchase prices have fallen to USD 4.65 cents per kWh. Therefore, purchasing electricity at the high tariff of USD 8.26 cents cannot be justified. To continuously provide competitive energy to industry and exports, investments in the energy sector will be welcomed on the basis of procuring energy at lower cost, without giving preference by company or country.

¶ 34 At the Trincomalee Oil Tank Farm, excluding those provided to CPC and IOC (99 tanks with 10,000 metric ton capacity each), 61 tanks remain. Due to the strategic location, these tanks have high potential to enter the international fuel market. Therefore, we expect to develop them in partnership with international companies.

¶ 35 13. Agriculture and food security

¶ 36 The agriculture sector employs nearly 30% of the labor force and is the backbone of the economy. Enhancing the sector’s potential is essential to expand rural economic opportunities for the majority of Sri Lankans.

¶ 37 Government policy focuses on increasing productivity, competitiveness, and resilience. The fertilizer subsidy for paddy farmers will continue. The Government has already allocated Rs. 35,000 million for 2025. Priority areas to be supported through Budget allocations include improved quality seed development, management of irrigation and drainage systems, and efficient water use in agriculture.

¶ 38 (i) Maintaining adequate paddy stocks

¶ 39 As a fallback measure to bridge demand-supply gaps in the rice market and prevent erratic price fluctuations, from the 2024/25 Maha season it is decided to maintain an adequate paddy stock. I propose to allocate Rs. 5,000 million for this.

¶ 40 (ii) Information systems

¶ 41 A major deficiency in the agriculture sector is the lack of sufficient and timely data to make correct decisions. Therefore, a proper data and information system covering the entire value chain from production to consumers will be established. Initially, this will be supported by the ADB-funded “Food Security and Livelihood Emergency Assistance Project,” and subsequently expanded with World Bank support under the “Integrated Rural-Urban Development and Climate Resilience Project.”

¶ 42 (iii) Increasing production of other field crops

¶ 43 In addition to paddy, production of green gram, black gram, chilies, red onion, cowpea, soy, maize, potatoes, and other grains and tuber crops will be increased through an accelerated plan over 2025–27. I propose to allocate Rs. 500 million in 2025 for this. It is also appropriate to develop a regulatory framework to organize paddy/rice market supply, procurement, and storage. Accordingly, the Paddy Marketing Board Act will be amended to provide authority for collection and storage of paddy and rice.

¶ 44 (iv) Productive use of land

¶ 45 Lands managed by the Land Reforms Commission, Regional Plantation Companies, Sri Lanka State Plantation Corporation, and People’s Estate Development Board that are not being used for productive purposes will be identified and released for private investment in agricultural production and agro-based or non-agro small and medium enterprises, considering land suitability. I propose to allocate Rs. 250 million to undertake initial measures.

¶ 46 (v) Youth entrepreneurship and producer cooperatives

¶ 47 There are many global examples of successful producer cooperatives such as Fonterra, Amul, and the Mondragon worker cooperatives. An alternative production approach based on cooperative mechanisms is proposed. The Government will support the cooperative sector by providing required lands, agricultural extension services, and other assistance. Necessary infrastructure and financial incentives will be provided to strengthen the legal framework. I propose to allocate Rs. 100 million in 2025 for these initiatives.

¶ 48 (vi) Developing young entrepreneurs in agriculture

¶ 49 This initiative targets young entrepreneurs engaged in or aspiring to engage in agriculture-based SMEs, particularly start-ups and those seeking expansion. I propose to allocate Rs. 500 million for these efforts.

¶ 50 (vii) Dairy development

¶ 51 Currently, domestic milk production meets only about 45% of domestic demand. To enhance the dairy value chain and improve inclusive linkages now being implemented, it is planned to invest Rs. 2,500 million during 2025–2026.

¶ 52 (viii) Irrigation sector development

¶ 53 As a predominantly agriculture-based country, with about 75% of the population living in rural areas, total investment estimated for irrigation sector development in 2025 is Rs. 78,000 million. New water resource development projects such as Malwathu Oya, Gin Ganga, Nilwala, Maduru Oya Right Bank Development, and Mundeni Aru will be implemented gradually in the medium term within fiscal space. In 2025, Rs. 2,000 million will be allocated to rehabilitate downstream irrigation canals under the Kala Oya, Rajanganaya, Minneriya, and Huruluwewa schemes.

¶ 54 14. Plantations and export crops

¶ 55 (i) Increasing coconut production

¶ 56 Global demand for coconut products continues to rise. By 2030, total national coconut demand is estimated at 4,500 million nuts, of which 1,800 million for household consumption, and 2,700 million for industry. Based on Coconut Research Institute recommendations, I propose to allocate Rs. 500 million to provide high-yielding coconut seedlings to Northern farmers and develop lands to establish 16,000 acres of new coconut under the Northern Coconut Triangle.

¶ 57 (ii) Other export crops – spices

¶ 58 Measures will be taken to expand value addition of traditional exports like cinnamon. Through Sri Lankan missions, marketing and outreach will be improved. The Government will provide technical assistance to farmers to improve quality, support linkages with aggregators and exporters, and strengthen global value chain integration. I propose to allocate Rs. 250 million to implement an integrated product development and trade promotion program for Ceylon cinnamon and other export crops.

¶ 59 15. Fisheries and aquaculture

¶ 60 Expanding freshwater prawn production is constrained by limited availability of freshwater prawn post-larvae. To increase freshwater prawn populations in reservoirs and move towards an export-oriented production base, we propose to empower shrimp farmers and communities. Under PPP arrangements, possible farmer cooperatives, and local marketing networks, we will facilitate establishment of freshwater prawn hatcheries and integration with marketing networks. I propose to allocate Rs. 200 million for this.

¶ 61 16. Social protection

¶ 62 Sri Lanka’s achievements in social development and social protection are higher than many developing countries. However, notable demographic and social changes—smaller family units, increasing elderly population, low female labor force participation, and a shrinking labor market—have created a challenging situation. Inequalities and vulnerabilities persist among children, elderly, women, persons with disabilities, and the poor. The Government is responsible for protecting and empowering them as productive, equal partners in society.

¶ 63 (i) Increasing “Aswesuma” benefits

¶ 64 To reduce the burden on vulnerable communities, the Government has increased cash transfers for those included in the Social Registry. Accordingly, the net Government expenditure on social protection in 2025 has been increased to Rs. 232.5 billion. Monthly cash grants for the two groups—poor and extremely poor—have already been increased from Rs. 8,500 to Rs. 10,000 and from Rs. 15,000 to Rs. 17,500 respectively, effective January 2025. Additionally, the period for the transitional group’s cash grants ends on 31 March 2025; we propose to extend this until 30 April 2025. A survey to provide another opportunity to include eligible households not covered will be completed in May 2025.

¶ 65 (ii) Increased payments for CKD patients / persons with disabilities / elderly

¶ 66 I propose to increase the monthly payment for chronic kidney disease patients and persons with disabilities from Rs. 7,500 to Rs. 10,000, and for the elderly from Rs. 3,000 to Rs. 5,000, effective April 2025.

¶ 67 (iii) Empowering Aswesuma beneficiaries for sustainable change

¶ 68 In line with Government policy, 1.2 million Aswesuma beneficiary households will be empowered using Government and external financing. With assistance from the ADB and the World Bank programs, about 25,000 families have been selected under a pilot for empowerment. Remaining eligible families will be empowered gradually using domestic funds. I propose to increase the allocation for empowerment programs by Rs. 500 million.

¶ 69 Multiple welfare measures are being introduced and implemented. To ensure necessary educational materials for students from the lowest strata, a Rs. 6,000 grant is provided for books and stationery. To support livelihoods of fisher communities affected by the economic crisis, a kerosene subsidy worth Rs. 3 billion was provided from October 2024 to March 2025.

¶ 70 (iv) Improving welfare of institutionalized children – upgrading certified schools/probation homes/childcare institutions

¶ 71 There are currently 379 certified schools/probation homes/children’s homes, 47 of which are government-run. Facilities are inadequate, safety is lacking in some places, and some buildings need repairs or have insufficient space. I propose to allocate Rs. 500 million to enhance physical and human resources and improve the capacity of child care centers.

¶ 72 (v) Child-friendly transport for institutionalized children to attend courts – transport for juvenile offenders

¶ 73 Institutionalized children are vulnerable due to lack of transport and other reasons. I propose to allocate Rs. 250 million in 2025 to the Ministry of Women’s Affairs to procure required vehicles and establish child-friendly transport systems for court-related travel.

¶ 74 (vi) Enhancing social protection of orphans and youth

¶ 75 We propose a comprehensive social protection and housing package for orphans to ensure their well-being, long-term support with skills development and financial security, and reintegration as empowered individuals contributing positively to the economy.

¶ 76 The 2025 Budget proposes programs for children in state institutions and probation homes. Implementing agencies should prioritize:

¶ 77 - A monthly Rs. 5,000 grant for institutionalized children and orphans, of which Rs. 2,000 will be deposited in the child’s bank account and Rs. 3,000 provided to the legal guardian under government supervision for the child’s expenses. Rs. 1,000 million is allocated for 2025. - Many of them lack family support systems to start life with housing and security, delaying marriage and causing socio-economic stress. Recognizing this, I propose a Rs. 1 million housing grant to build a stable house. Rs. 1,000 million is allocated in 2025. - Enroll children in probation homes and state rehabilitation centers in nearby national or provincial schools to ensure proper education. - Provide skills training in rehabilitation centers that can lead to NVQ Level 3 or 4 vocational/professional certificates, enabling employability and livelihoods upon release. The Government will facilitate issuance of Police/Grama Niladhari character certificates to enable fair access to jobs and avoid stigmatization. - Upon reintegration at 18 years (and at marriage, especially for females), institutionalized youth will be given priority for government housing assistance, training, and employment opportunities. - Amend the law to allow those over 18 who are not yet ready for reintegration, and are at risk of abuse, to continue living in the same institutions.

¶ 78 (vii) Disability database

¶ 79 A significant number of people live with one or more disabilities, yet we lack a reliable database on prevalence, challenges, education, economic participation, and employment. Therefore, I propose to allocate Rs. 100 million in 2025 to establish a comprehensive disability database under the Secretariat for Persons with Disabilities, in collaboration with the Department of Census and Statistics.

¶ 80 (viii) Disaster relief

¶ 81 The current compensation for death or permanent disability due to disasters is Rs. 250,000. Measures have been taken to increase this to Rs. 1,000,000 for death or permanent disability from all causes including natural disasters and wild animals. Further, for children’s homes, elders’ homes, and residential facilities for persons with disabilities affected by disasters, a compensation scheme up to Rs. 2.5 million for property damage has been introduced.

¶ 82 (ix) Mental health

¶ 83 We are witnessing tragic suicides among youth. Recognizing the severity of this social issue, I propose to allocate Rs. 250 million to expand and improve counseling services for mental health patients through the Ministry of Health and, for school students, with the cooperation of the Ministry of Education.

¶ 84 (x) Local production of assistive devices

¶ 85 Assistive devices are vital for persons with disabilities and are considered part of the body. There is a need for a comprehensive program to expand local production facilities for such devices in all provinces. I propose to allocate Rs. 500 million in 2025 for this. Initially, the assistive device production facility at the National Neurology and Rehabilitation Hospital in Ragama will be expanded as a national center, with regional production centers established as needed.

¶ 86 (xi) Essential food packs at concessionary prices during the New Year season

¶ 87 The Government has decided to provide a “Seasonal Essentials” food pack at concessionary price to help households manage the increased cost of living. Accordingly, during the upcoming New Year season, through Lanka Sathosa, a dry ration pack including rice, canned fish, dhal, onions, yams, and dried fish will be provided. I propose to allocate Rs. 1,000 million to implement this.

¶ 88 17. Migrant workers

¶ 89 Sri Lanka’s migrant workers play a vital role in development through foreign remittances and the skills they bring back upon return. We are exploring ways to reward and encourage this important community. As a first step, I propose to provide a more generous, non-conditional ex-gratia payment to Sri Lankan migrant workers upon return. Criteria and parameters will be determined and published after detailed study.

¶ 90 18. Special interest for senior citizens

¶ 91 We propose a special interest scheme for senior citizens. Under this, individuals over 60 years will be eligible for an additional 3% above market interest on a one-year fixed deposit up to Rs. 1 million. I propose to allocate Rs. 15,000 million to implement the 3% interest subsidy. This will be implemented from July 2025.

¶ 92 19. Creating a drug-free society

¶ 93 Recognizing the importance of a multifaceted approach beyond punitive measures, I propose to prepare a comprehensive program including awareness campaigns, rehabilitation with psychological counseling, community empowerment, and law enforcement. I propose to allocate Rs. 500 million to implement this program and build a drug-free society.

¶ 94 20. Skills development program for convicted prisoners

¶ 95 There are about 30,000 inmates across 37 prisons, roughly one-third convicted and the rest on remand. Overcrowding severely affects living standards and violates the principle that “prisoners are human.” Around 65% are under 40, the prime working age. I propose to conduct market-relevant skills development and vocational training programs with vocational institutions and award appropriate NVQ certificates. I propose to increase the existing allocation by Rs. 100 million.

¶ 96 21. Modernizing public transport

¶ 97 An efficient transport system is crucial to improve mobility and access. Upgrading existing public transport and introducing new modes, especially to meet rising urban and suburban demand, is essential. Accordingly, modernization of road and rail-based public transport is imperative.

¶ 98 (i) Bus sector modernization

¶ 99 As an initial step, a technologically advanced fleet of modern, comfortable buses will be introduced on a pilot basis. In the Colombo Metropolitan area, 100 air-suspension, low-floor, comfortable buses will operate on three main corridors. We propose to allocate Rs. 3,000 million to procure 100 low-floor buses. In addition, the SLTB will add 200 low-floor passenger buses using its own funds. These buses will be operated under newly established companies collectively called Metro Bus Companies (MBCs).

¶ 100 (ii) Rail sector modernization

¶ 101 Rail is vital for long-distance as well as urban/suburban public transport. However, current stock negatively affects safety, comfort, and speed. Developing rail as an industry by focusing on local manufacturing and maintenance is important. As a first step, I propose to allocate Rs. 500 million to refurbish old coaches to improve efficiency and meet growing demand. Further, I propose to allocate Rs. 250 million in 2025 to commence local manufacturing of new passenger coaches to meet national needs.

¶ 102 To enhance effective rail services and public transport, Rs. 250 million will be allocated in the 2025 Budget for initial works to extend the Kelani Valley railway line, currently operating up to Avissawella, beyond Avissawella in phases.

¶ 103 The Government will explore, after consultation with both parties, the feasibility of integrated operations on each route between SLTB and private bus operators. The Government will continue investing in the Kandy Multimodal Transport Terminal project, which has had significant regional development impact.

¶ 104 (iii) Rail transport for agricultural produce

¶ 105 Road transport for farm produce faces high costs, post-harvest losses, congestion, and environmental issues. To address this, we propose a dedicated rail transport service from production centers for agricultural goods. The project will begin with a feasibility study to assess technical and financial viability. Subject to study recommendations, we plan to develop Thambuttegama and other stations with warehousing and material-handling facilities. We propose an initial Rs. 100 million for the feasibility study.

¶ 106 (iv) Resolution of SriLankan Airlines’ debt

¶ 107 SriLankan Airlines is a leading carrier for passengers and cargo. The previous Government’s attempt to attract private investments by selling state-owned enterprises did not succeed. In this context, the Government will enter into agreements with lending banks and allocate Rs. 10,000 million in 2025 for principal repayments and Rs. 10,000 million for interest. Once these debts are resolved, SriLankan Airlines will be fully responsible for ensuring operational profitability. A new medium-term strategy is being prepared by the company. Accordingly, I propose to allocate Rs. 20,000 million.

¶ 108 (v) Improving road infrastructure

¶ 109 Road networks are a key component connecting citizens to markets and public places. Giving priority to roads connecting under-developed villages, tourist sites, industrial zones, and economically important areas, I propose to allocate an additional Rs. 3,000 million on top of the already allocated Rs. 26,680 million for rural roads.

¶ 110 To ensure safe and reliable transport for all road users, we propose to allocate an additional Rs. 1,000 million for rehabilitation of rural bridges.

¶ 111 (vi) Rural roads and bridges in the Northern Province

¶ 112 The Northern Province has been largely isolated from the main development stream, yet holds immense potential to contribute to our economy. Focusing on basic infrastructure, I propose to allocate Rs. 5,000 million to improve rural roads and bridges in the Northern Province.

¶ 113 (vii) Construction of Vattuvakal Bridge in Mullaitivu

¶ 114 The narrow Vattuvakal Bridge on the main road linking Mullaitivu–Puthukudiyiruppu–Jaffna at the mouth of the Nandikkadal Lagoon is in a dilapidated and dangerous condition. We propose to construct a new bridge suitable for the development needs of Mullaitivu District, and allocate Rs. 1,000 million under this Budget to commence works.

¶ 115 22. Regional development

¶ 116 To build a productive economy, a diversified Budget program for 2025 is being implemented. Accordingly, each Member of Parliament will be allocated Rs. 10 million under the diversified Budget in 2025. Of the already allocated Rs. 11,250 million, I propose to utilize Rs. 2,250 million for this purpose, with the remaining Rs. 9,000 million for essential development activities.

¶ 117 23. District development program

¶ 118 Despite continuous annual Budget investments across many programs, issues in many districts remain unresolved, including service delivery, trade/marketing, institutional improvements, infrastructure gaps, and emerging needs. To enable inclusive and sustainable development so local communities enjoy a better life and the private sector invests, we propose to allocate Rs. 2,000 million in 2025 to address district-level issues.

¶ 119 24. Eastern Province development

¶ 120 The Eastern Province has significant economic potential. With special focus on education, health, agriculture, fisheries, tourism, and social empowerment, we propose to implement an extensive development program in the Eastern Province with Indian multi-sectoral grant assistance, to support infrastructure and livelihood improvements.

¶ 121 25. Uplifting the living standards of the Upcountry Tamil community

¶ 122 The Upcountry community—an integral part of our nation—has lived with hardships for a long time, and still remains below an acceptable standard of living. Accordingly, we propose the following initiatives with an allocation of Rs. 7,583 million: - Rs. 4,267 million for estate housing and infrastructure development; - Rs. 2,450 million for vocational training, livelihoods, and infrastructure development for Upcountry Tamil youth; - Rs. 866 million for smart classrooms in schools serving the Upcountry Tamil community.

¶ 123 26. Industrial development

¶ 124 Industry plays a key role in job creation, income generation, innovation, and export growth. The following proposals will be undertaken:

¶ 125 (i) Value addition to Sri Lanka’s mineral resources and essential industrial inputs for domestic production: A chemical industrial park, including production of acids and alkalis, is proposed in Paranthan in the Northern Province. Four technology zones at Kankesanthurai, Mankulam, Iranavila, and Trincomalee, and the previously initiated but stalled industrial parks in Kurunegala and Galle will be developed. We propose to allocate Rs. 500 million.

¶ 126 (ii) Dedicated industrial park for vehicle and component manufacturing: To meet demand for auto parts, enhance domestic value addition in vehicle assembly/manufacturing, and remain competitive in export markets, substantial investment is needed. A dedicated park for auto components and parts manufacturing is proposed. Within the already allocated Rs. 1,500 million under the Ministry of Industries, I propose to meet requirements for this purpose.

¶ 127 27. Clean Sri Lanka Program

¶ 128 The Clean Sri Lanka Program will be implemented through three pillars—social development, environmental development, and ethical development—to sustainably uplift Sri Lankan society. This program will harness the collective support of the Government machinery, entrepreneurs, businesses, national and international NGOs, the Sri Lankan diaspora, international donor agencies, and various professionals and experts.

¶ 129 Under this, we envisage: conducting cultural festivals that all communities can enjoy to build communication, mutual understanding, and cooperation among diverse ethnic and religious groups; creating facilities for persons with disabilities; improving ethics and capacity among service providers such as three-wheeler and taxi drivers and tour guides; restoring selected heritage towns; renovating under-resourced provincial school buildings, equipment, and health facilities; fostering high-quality learning environments for early childhood with private participation; improving urban sanitation; promoting road safety; preventing drug abuse; managing stray animals; solid waste management; making beaches attractive and environmentally sustainable; protecting water bodies; improving river water quality; streamlining public service delivery; enhancing resource efficiency; building a dynamic public service; and promoting clean Sri Lankan values.

¶ 130 I propose to allocate Rs. 5,000 million in 2025 with donor co-financing.

¶ 131 28. Solid waste management

¶ 132 Solid waste management is a growing challenge in many parts of the country. Anuradhapura—rich in historical and cultural value—faces increasing population and medical/general waste from the Anuradhapura Teaching Hospital, impacting public health and the environment. I propose to allocate Rs. 750 million to establish waste management facilities, enhancing cleanliness, protecting the environment, and promoting sustainable development in Anuradhapura.

¶ 133 29. Reducing human–elephant conflict and forest conservation

¶ 134 To reduce human fatalities, property damage, and crop losses due to wild elephants, multiple measures are being implemented, including upgrading about 5,611 km of electric fences (with 1,456 km identified for renewal), establishing guard posts, procuring equipment, removing invasive species to improve elephant habitats, and better resource management of wildlife zones. Rs. 300 million is allocated for these activities.

¶ 135 Additionally, Rs. 100 million is allocated to develop and maintain 270 field offices, range offices, divisional offices, and HQ facilities, including vehicles and boats, to support wildlife crime prevention and comprehensive efforts to reduce human–elephant conflict. A further Rs. 240 million is allocated for compensation to victims of elephant attacks. Altogether, Rs. 640 million is allocated for mitigating human–elephant conflict.

¶ 136 Furthermore, Rs. 1,050 million is allocated to promote natural forest regeneration and curb deforestation, supporting reforestation, conservation initiatives, commercial forestry expansion, environmental protection, and mangrove management, while facilitating eco-friendly tourism, wildfire control, and prevention of forest-related crimes.

¶ 137 30. Sustainable finance

¶ 138 The Government will leverage environmental, social, and governance (ESG)-based sustainable finance opportunities by creating an enabling environment. The Ministry of Environment will coordinate with the Ministry of Finance and the Central Bank to access global sustainable finance linked to climate initiatives and related programs.

¶ 139 31. Financial market development

¶ 140 As the economy recovers from crisis, focus on developing the financial market to support real sector growth is appropriate. The Government will encourage private and suitable public enterprises to raise required funds through equity and debt capital markets. With bank interest rates declining, access to well-regulated financial products that offer reasonable returns to small investors is crucial. Unit trusts, mutual funds, and other collective investment schemes will be pivotal. Within a robust regulatory environment, the financial sector must innovate while ensuring necessary safeguards and investor awareness.

¶ 141 32. Governance reforms

¶ 142 Corruption is a major impediment to economic progress. Eliminating it requires collective effort, with public officials, the private sector, and citizens recognizing their roles. The legal framework will be strengthened. With international support, and increased funding, measures against corruption will be expedited, including enacting the Proceeds of Crime Bill and further empowering the Commission to Investigate Allegations of Bribery or Corruption. Following a joint drafting process, we aim to review and implement draft laws related to illicit income.

¶ 143 33. Sri Lanka Day

¶ 144 The Government’s policy framework “Prosperous Nation – Beautiful Life” articulates a vision for a harmonious Sri Lanka committed to reducing disparities. It emphasizes forming cultured individuals embodying harmony, ethics, and good conduct. To promote national reconciliation among communities and to celebrate Sri Lankans, I propose to commence a “National Cultural Festival.” I propose to allocate Rs. 300 million for this purpose.

¶ 145 34. Housing for internally displaced persons (IDPs)

¶ 146 Through reconciliation efforts and land releases, IDPs have been resettled, and post-conflict refugees are returning to the Northern and Eastern Provinces. However, basic infrastructure and utilities for resettled families are still unmet. We propose a multi-pronged strategy to address key issues in the North and East, accelerate the housing program, and provide essential relief to homeless families based on current needs. Rs. 1,500 million is allocated in the 2025 Budget.

¶ 147 35. Essential maintenance of government-built apartments

¶ 148 Due to poor maintenance and usage issues, many government-built apartment complexes are in deteriorated condition, with cracks, peeling, corrosion, and water leakage. We propose to allocate Rs. 1,000 million for essential maintenance of these central government-built apartment complexes.

¶ 149 36. Housing for artists/journalists

¶ 150 With assistance from the People’s Republic of China, 1,996 houses are under construction across multiple sites. Of these, the 108-unit multi-storey complex at Kotte is to be allocated to artists and journalists who have contributed to our society’s cultural richness.

¶ 151 37. Drinking water sector

¶ 152 (i) Expediting large water supply projects and community water schemes

¶ 153 Through the National Water Supply and Drainage Board (NWSDB) and the Department of Community Water Supply, 62% of the population receives safe drinking water. Recognizing the national importance of safe water, the Government is committed to provide necessary counterpart funding to expedite completion of delayed projects—Gampaha-Aththanagalla-Minuwangoda Integrated Water Project, Aluthgama, Pothukar, and Thambuttegama water supply projects—affected by the economic crisis and suspension of credit by lenders. Accordingly, over the next two years, Rs. 41,234 million will be provided, including Rs. 20,000 million in 2025.

¶ 154 (ii) Expansion of community water supply

¶ 155 We recognize the need for community-based rural water supply projects, especially in villages with limited pipe-borne water, including in the North and CKD-affected dry zones, to provide fully treated drinking water and improve quality of life. Therefore, within the 2025 Budget estimates under the Department of Community Water Supply, we propose to utilize Rs. 2,000 million to complete ongoing community schemes and commence new schemes with special focus on the Northern Province.

¶ 156 (iii) Resumption of the Giribawa–Eppawala Water Supply Project

¶ 157 Communities in Giribawa and Eppawala in the dry zone of the North Central Province face difficulties in accessing safe drinking water, creating significant risks. Recognizing the importance of providing treated water from surface sources, water will be supplied from Kala Wewa via Kala Oya, and from Rajanganaya reservoir, on a priority basis to Giribawa–Eppawala. We propose to allocate Rs. 1,000 million to restart initial works and provide pipe-borne water to the area.

¶ 158 38. Filling essential vacancies in the public service

¶ 159 We have ended the past practice of appointing political supporters to the public service. In line with our vision, recruitment, promotions, and transfers will be based on merit and competency without political interference. To meet citizen expectations and address challenges from COVID-19, economic downturn, and political uncertainty, we will implement a targeted recruitment plan to fill essential positions strictly against cadre vacancies, adding 30,000 personnel from this year. I propose to allocate Rs. 10,000 million in 2025.

¶ 160 39. Public sector salary increase

¶ 161 It has been about a decade since the last full salary review; this is the right time to comprehensively reform the structure to ensure a dignified standard of living, attract and retain talent, while avoiding excessive fiscal strain. Accordingly: - The minimum monthly basic salary will increase by Rs. 15,750 from Rs. 24,250 to Rs. 40,000. With interim and special allowances consolidated into the basic, the minimum net increase will be Rs. 8,250. - The Rs. 15,750 basic increase will also apply on the same basis to the Judiciary, state corporations, statutory bodies, university staff, and tri-forces officers. - In addition, the annual increment value will increase by 80%, raising the minimum annual increment from Rs. 250 to Rs. 450. Annual increments for all public servants will increase by the same percentage.

¶ 162 The total cost is estimated at Rs. 325 billion and will be implemented in phases given fiscal constraints: - From April 2025, Rs. 5,000 of the net increase and 30% of the remainder will be paid. - The remaining 70% will be paid in two equal tranches in January 2026 and January 2027.

¶ 163 Accordingly, Rs. 110 billion is proposed for 2025. We have carefully assessed fiscal implications to ensure consistency with our constraints and targets.

¶ 164 For officers retiring on or after 01.01.2025, pensions will be calculated under the new salary structure so that their retirement benefits reflect the 2025 scheme. Considering the higher minimum basic salary, the public servants’ distress loan limit will increase from Rs. 250,000 to Rs. 400,000. Further details are in the Technical Notes (Annex).

¶ 165 40. Private sector wage increase

¶ 166 Employers’ associations have agreed to raise the national minimum wage for private sector employees to Rs. 27,000 in April 2025, and to Rs. 30,000 from 2026.

¶ 167 41. Wage review for plantation workers

¶ 168 Approximately 1.5 million workers are engaged in tea, rubber, and coconut plantations. Their standard of living must be improved. In addition to development programs for the plantation sector, the Government is committed to increase their daily wage to Rs. 1,700.

¶ 169 42. Public sector pensions

¶ 170 Soon after the Presidential Election victory, pensions were increased by Rs. 3,000. Since all pensioners up to 31.12.2017 fall under a single salary structure, revising pensions only for those who retired from 2016–2020 to align with the fifth phase of the 2020 salary scale would create disparities. Given this long-outstanding issue and limited fiscal space, a phased solution is needed. We propose to revise pensions of those who retired before 01.01.2020 in line with Circular 3/2016, aligning to the 2020 salary scales. As a first step, pensions of all who retired before 01.01.2018 will be revised in line with the third phase of the 2018 salary scales under Circular 3/2016, effective July 2025. Rs. 10,000 million is allocated in 2025.

¶ 171 Further pension revisions linked to the fourth and fifth phases will be implemented in July 2026 and July 2027 respectively.

¶ 172 43. Legal reforms

¶ 173 To establish an enabling legal framework for rapid economic growth, good governance, and effective public service delivery, the Government will introduce several legal reforms in the coming year, including: a framework law for public–private ownership of state enterprises; legislation to improve governance in procurement, state asset management, statistics, data sharing, valuation, asset management, microfinance, debt, AML/CFT; and others. Details are in Annex VIII to the Budget.

¶ 174 44. Revenue measures

¶ 175 The foundation of Sri Lanka’s economic reform program is revenue-based fiscal consolidation. In 2022, revenue was 7.3% of GDP, reflecting one of the lowest tax-to-GDP ratios globally.

¶ 176 A substantial revenue increase is expected in 2025 from the relaxation of motor vehicle import restrictions effective 1 February 2025. This will be carefully monitored to ensure no adverse impact on external sector stability. Other measures already announced in Parliament in December 2024 include raising the PIT threshold, adjusting the second bracket of income tax, removal of VAT on fresh milk and yoghurt, and implementing the assessed rental income tax agreed under the previous administration. The revenue impact will be offset by VAT on digital services, corporate income tax on services exports, and higher corporate taxes on cigarettes/alcohol and betting.

¶ 177 These policy measures are expected to raise required revenue to achieve the 2025 revenue target of 15.1% of GDP. Future Budgets will both provide relief to vulnerable groups and strengthen fiscal stability, improve tax compliance, and reinforce administration through enhanced monitoring systems and broad digitalization to reduce human interfaces.

¶ 178 Sri Lanka is moving towards a cashless economy as part of broader digitalization to streamline the economy and improve revenue collection. As a key initiative, POS machines will be promoted to reduce cash holdings, especially among VAT-registered enterprises, and facilitate digital transactions. A cashless economy not only curbs tax evasion and illicit financial activities but also supports growth and stability.

¶ 179 Digitalizing revenue administration and advancing the digital economy are expected to significantly boost collections. However, revenue is not solely the responsibility of collecting agencies. Other stakeholders, including audit firms and tax accountants, also have obligations to ensure the Government does not face revenue leakage, within a socially acceptable and lawful framework. Appropriate measures will be taken to ensure compliance with legal and regulatory frameworks.

¶ 180 We believe these administrative and compliance improvements will enable Sri Lanka to exceed revenue targets beyond 2025. In that scenario, more relief can be provided to people without undermining revenue targets and while ensuring fiscal and macroeconomic stability.

¶ 181 45. Borrowing limit

¶ 182 The borrowing limit for the 2025 Appropriation Bill is provided in Annex II, and related revenue and expenditure measures in Annex III. As required under the Public Financial Management Act No. 44 of 2024, documents to be tabled with the Second Reading of the Budget have also been submitted.

¶ 183 Conclusion

¶ 184 The policies I outlined today reflect the vision for which I was elected to this office. I did not craft them alone. They are the outcome of a collective Cabinet effort, many of whom had never served in Parliament but bring broad experience and practical knowledge. They arise from the dedication of committed civil servants and policy makers, and from renowned, patriotic experts who are confident they can contribute to clean, energetic, and heartfelt governance for the first time in our history.

¶ 185 We have begun to restore justice, reduce the cost of living, and rebuild trust in institutions. For years, investors believed to invest in Sri Lanka one had to first “invest” in intermediaries. That era is over. No elected or appointed official in this Government will ever ask for—or expect—bribes or favors for doing, or not doing, their job. If any attempt is made to bend or break the law, those responsible will be fully investigated and prosecuted. This Government will never tolerate corruption. No more bribes. Those who seek illicit payments should be the ones afraid.

¶ 186 Our judiciary has never been more independent. Our police have never had more authority and freedom to enforce the law without fear or favor. Those who left Sri Lanka and live abroad know that solving corruption is harder than simply enforcing the law. It requires modernizing how government works, making the machinery more efficient and more transparent—addressing root causes by making it harder to solicit bribes and avoiding incentives to pay them.

¶ 187 Sri Lanka has never had a better opportunity to connect with the modern world. We all know the story of Lee Kuan Yew once aspiring for Singapore to reach Sri Lanka’s standard. Today, I see a chance for a united, clean, and prosperous Sri Lanka that exceeds everyone’s expectations. To our diaspora—whether born here or told stories of your motherland by your parents—know that you are Sri Lankans, and your country is proud of your success. We understand why you lost hope. I am grateful for every effort you make—even from afar—to help our country. I invite you to return and see how much has changed. I call on you to contribute your expertise, talent, and vision in the private, public, or non-profit sectors. Join us to achieve a success that only all of us together can reach. Work with us.

¶ 188 Our people voted last year to rebuild our country, unite to unlock our citizens’ potential, and chart a new path. For the first time in history, from North to South and East to West, Sri Lankans are united behind a common purpose. Religion, ethnicity, gender, class, and age will never again divide us. I assure you: the people will never again be pitted against each other, nor deceived by those who try to turn us against one another for personal or political gain.

¶ 189 I can speak for every passionate member of this Government—elected, appointed, and the thousands of hardworking, patriotic public officers who have joined us. We will never tire. We will never hesitate. We will never betray our principles. We will never let you down. We will lead by example, lift all Sri Lankans together. We will prosper together. We will all be proud of one another and of our beautiful, sacred country we call home.

¶ 190 Finally, I extend my thanks to the officers of the Ministry of Finance, especially to Treasury Secretary Mahinda Siriwardana, who worked tirelessly for weeks to finalize the Budget. I look forward to continued cooperation from Treasury officials to successfully implement the Budget on time and advance the Government’s economic program.

¶ 191 Thank you.

¶ 192 English Text of the Budget Speech – 2025

¶ 193 Preamble

¶ 194 Hon. Speaker, it is our pleasure to present the first National Budget of our Government to this House.

¶ 195 The country went through its deepest and most complex socio, economic and political crisis in 2022 since Independence. Although the crisis erupted in the year 2022, the underlying causes of the crisis are historical and structural. Corrupt governance, failed economic policies and irresponsible public financial management are the root causes of this crisis. As a consequence, there was breakdown of normalcy in economic activities in the country, which was experienced by all sectors and social groups from businesses to households. Shortages in goods and services including fuel, electricity, essential food and medicine caused severe hardships for the people of the...