Budget aims regaining economic autonomy: AKD

From left: Colombo University MBA Alumni Association President Suraj Radampola, Advocata Institute Chairman Murtaza Jafferjee, Adviser to the President on Economic Affairs and Finance Duminda Hulangamuwa, President Anura Kumara Dissanayake, Daily FT Editor and CEO Nisthar Cassim, Sri Lanka United National Business Alliance Chairperson Tania Abeysundara, Standard Chartered Bank Sri Lanka CEO Bingumal Thewarathanthri and Veritè Research Executive Director Dr. Nishan de Mel - Pix by Upul Abayasekara and Lasantha Kumara

• Speaking at Daily FT-Colombo Uni. MBAA Association’s post-Budget Forum says boosting growth and reserves key, aims to prepare for resumption of external debt servicing from 2028
• Expresses maiden Budget realisable while building culture against corruption and empowering private sector and rural economy
• In first in-person public forum after presenting 2025 Budget, engages with participants for over two hours with emphatic keynote followed by candid Q&A session involving experts

By Charumini de Silva

President Anura Kumara Dissanayake yesterday said the 2025 Budget is aimed at boosting growth and reserves to be prepared for the resumption of external debt servicing from 2028.

“We intend to use the next three years effectively to regain debt repayment capacity by 2028,” he asserted, acknowledging the constrained fiscal space but expressing confidence in disciplined economic management.

Keen to prove that where there is a will there’s a way, Dissanayake told the 15th consecutive post-Budget Forum, organised by the Daily FT and the Colombo University MBA Alumni Association with Standard Chartered Bank as strategic partner, that his maiden Budget would be realisable while building a culture against corruption and 

empowering the private sector and rural economy.

It was the President’s first in-person public forum after presenting the 2025 Budget on Monday (17) and he was engrossed for over two hours with participants who benefitted from an emphatic keynote followed by a candid Q&A session, which included Adviser to the President on Economic Affairs and Finance Duminda Hulangamuwa, Standard Chartered Bank Sri Lanka CEO Bingumal Thewarathanthri, Veritè Research Executive Director Dr. Nishan de Mel, Advocata Institute Chairman Murtaza Jafferjee, Sri Lanka United National Business Alliance Chairperson Tania Abeysundara, and Colombo University MBA Alumni Association President Suraj Radampola. The discussions were moderated by Daily FT Editor and CEO Nisthar Cassim.

The President said the Budget 2025 proposals include overhauling outdated laws and introducing digitisation measures aimed at transitioning towards a cashless economy.

Whilst noting that Sri Lanka is still under probation following the bankruptcy and external debt standstill in April 2022, the President admitted that full economic recovery typically takes a decade, but insisted that Sri Lanka has shown remarkable progress to accelerate the recovery process. 

“Our economy is running on conditions. There is no economic independence or sovereignty – it is under probation and being monitored,” he remarked, acknowledging the country’s constrained fiscal autonomy.

A key objective of the Budget 2025 is boosting Government revenue to 15.1% of GDP, a significant increase in a country where income tax compliance remains strikingly low. “We are aiming high with only 621 income tax files,” he said, highlighting the scale of the challenge. 

Dissanayake reiterated that the Budget prioritises economic decentralisation, driving growth into rural areas and integrating citizens as stakeholders in the economy. 

“There are two baskets – one with challenges, the other with financial provisions. However, financial resources are limited, while the challenges are extensive. The Government is taking on the task of repaying debts within three years while simultaneously boosting reserves and economic growth,” he stressed.

He also said capital expenditure will be directed towards rural economies, linking them to national economic activities. “The Government envisions developing village-level economic units and transforming them into community-led enterprises, inspired by successful cooperative models such as New Zealand’s Fonterra and India’s Amul,” he said.

Recalling past initiatives, he said: “We do not want to pursue romantic yet impractical programs. Instead, we aim to economically empower villages and collective communities that contribute to and benefit from economic activity, ultimately helping alleviate rural poverty.”

Dissanayake said fostering a surge in Small and Medium-sized Enterprises (SMEs) and empowering women entrepreneurs through this village level program remains a priority.

He also said reducing production costs is a key priority, with a particular focus on lowering energy expenses. “Our electricity tariff system is solely dependent on rainfall – if it rains, tariffs are reduced, but during droughts, they rise. It is high time we shift to renewable energy and maintain a fixed tariff system that doesn’t fluctuate based on climatic changes,” Dissanayake asserted, referencing discussions held during his recent visit to the UAE on government-to-government (G2G) energy partnerships.

The President said education remains a major focus, with Rs. 650 billion — the highest allocation to overhauling the system. “The intention is to transition from a rigid, one-track curriculum to a diversified, multi-directional model that includes vocational training and skill development,” he said, adding that education is another way of alleviating poverty, underlining plans to restructure both human and physical resources within the school system.

In terms of the public sector, he emphasised that the issue is not its size but the financial burden it imposes.

He outlined four potential strategies for managing State institutions: closure, mergers, structural reforms or changes in management. “Public expenditure management remains a priority, with plans underway for a comprehensive review of State institutions’ costs. We aim to resolve the inefficiencies we deal with daily and make these institutions target-oriented,” he added.

Dissanayake also stressed the importance of an export-driven economy, announcing plans to sign new trade agreements and projecting higher export earnings this year and placing special emphasis on developing a port-centric economy, establishing Sri Lanka as a regional transhipment hub. 

Additionally, the President highlighted the role of Sri Lanka’s diplomatic service in expanding the country’s economic opportunities on the global stage.

Tourism was another thrust sector receiving significant attention, with city branding initiatives set to transform destinations such as Anuradhapura, Yapahuwa, and Jaffna into major tourism hubs. 

 

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President and experts dissect new Govt.’s maiden Budget 2025