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2025 Budget: Positive Welfare Measures, but Economic Concerns Remain, says Prof. Tissa Vitharana

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Tissa

Prof. Tissa Vitharana, leader of the Lanka Sama Samaja Party (LSSP), has welcomed several key aspects of the 2025 national budget, particularly its emphasis on social welfare, but raised significant concerns about the country’s economic trajectory, urging stronger action to avoid a return to bankruptcy.

One of the most promising features, according to Vitharana, is the prioritization of nutrition for the nearly 63% of families in Sri Lanka who struggle to access three meals a day. With malnutrition rates possibly doubling to 14.3%, Vitharana emphasized that Sri Lanka’s robust public health service is well-positioned to target the most vulnerable households. He expressed hope that the government would implement this initiative effectively, acknowledging the importance of addressing food insecurity in a country where many families are forced to subsist on one meal per day for adults and two for children.

Vitharana also lauded the government’s focus on promoting industrial development, particularly in the export sector, pointing to the successful Vidatha Program and SLINTEC, which he helped establish as former Minister of Science and Technology. He noted that over 30,000 entrepreneurs have emerged through the Vidatha program, and many are now contributing to the country’s export revenue. He urged the President and Finance Minister to ensure that the budget adequately supports this critical sector.

Another highlight of the budget, according to Vitharana, is the allocation for education, renewable energy, and digitalization. He also supported the government’s initiative to make use of the country’s oil tanks, which could potentially enhance energy security.

However, Vitharana expressed concerns regarding the health sector, particularly the severe shortage of essential medicines, many of which are imported at high prices. He pointed out that this shortage is causing immense hardship for those with chronic illnesses, particularly low-income individuals who cannot afford the high costs of private pharmacies. He called for greater attention to implementing the WHO-approved Senaka Bibile medicinal drug policy, which ensures affordable, high-quality medicines.

On the economic front, Vitharana criticized the government’s growing reliance on foreign loans, noting that recurrent expenditure is four times higher than capital expenditure. This, he argued, undermines the potential for economic development and may lead Sri Lanka back into a debt crisis. He also highlighted the situation in the rice market, where traders and mill owners are benefiting from higher prices while government reserves remain low.

Vitharana further expressed concern about the budget’s reliance on indirect taxes, which he believes will disproportionately burden the poor and middle classes, exacerbating income inequality.

In conclusion, Vitharana drew comparisons to the 1970s, recalling how LSSP leader Dr. N. M. Perera, as Finance Minister, navigated Sri Lanka through an economic crisis without raising taxes. He urged the current government to adopt similar strategies to avoid exacerbating the nation’s fiscal problems. He also referenced his COPA Chairman’s report in Parliament, which advocates for quicker tax collection from large corporations and tackling issues such as the ongoing elephant-human conflict.



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Plans for 2026 on the journey towards a digital economy Under President’s review

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A discussion to review the progress of projects implemented under the Ministry of Digital Economy in 2025 and to examine new projects planned to be implemented under the 2026 budgetary allocations was held on Monday (19) morning  at the Presidential Secretariat under the patronage of the Minister of Digital Economy, President Anura Kumara Dissanayake.

Special attention was paid to the plans and progress of programmes to promote a cashless economy.

Accordingly, an extensive discussion was held on the progress of projects planned by the Government to promote a cashless economy in Sri Lanka, including the digitalisation of government institutions, promotion of QR transactions, establishment of a Cloud infrastructure centre, a national programme to provide high-speed broadband facilities, provision of single-window facilities, the digital identity card project and the project to digitalise payment of traffic spot fines.

Noting that much of the economic activity of rural communities remains in the informal sector, the President emphasised the need to formally document these activities and stressed that this is essential when formulating future economic and development plans.

The performance, progress and future plans of institutions under the Ministry of Digital Economy, including Sri Lanka CERT, the Data Protection Authority and the Telecommunications Regulatory Commission (TRC), were also reviewed.

The current status and new recruitments of the GovTech institution, established to implement the Government’s digitalisation programme, were also discussed.

Deputy Minister of Digital Economy, Eranga Weeraratne, Secretary to the President, Dr. Nandika Sanath Kumanayake, Senior Presidential Adviser on Digital Economy, Dr. Hans Wijayasuriya, Senior Additional Secretary to the President, Roshan Gamage, Secretary to the Ministry of Digital Economy, Varuna Sri Dhanapala, senior officials of the Ministry and heads of institutions under the Ministry also participated in the discussion.

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Power sector reforms: CEB trade unions threaten strike

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A simmering confrontation between the government and the powerful Ceylon Electricity Board (CEB) trade unions intensified yesterday, with the latter signalling continued industrial action, even as authorities moved decisively to prevent any disruption to electricity supply.

The dispute centres on the government’s determination to restructure and unbundle the CEB under amendments to the Electricity Act, a reform drive officials describe as unavoidable to curb losses, strengthen governance and stabilise the national power sector. This has also been a long-standing demand of international donors, particularly the International Monetary Fund and the World Bank.

Some 24 CEB unions, including powerful engineers’ and workers’ organisations, have rejected the move, warning that the proposed restructuring could weaken institutional coordination, undermine job security and eventually place additional pressure on consumers.

Union representatives said work-to-rule campaigns and other limited forms of industrial action would continue, despite electricity services being declared an essential service — a legal measure that effectively curtails full-scale strike action.

“These reforms are being imposed without proper consultation. Decisions taken in haste could have serious consequences for grid stability and public confidence,” a senior union official told The Island.

The government, however, has adopted a firm posture, cancelling all categories of leave for CEB staff and directing management to ensure uninterrupted operations across generation, transmission and distribution.

A senior official at the Power and Energy Ministry said the administration would not allow labour unrest to jeopardise electricity supply, stressing that energy security was central to economic recovery.

“Electricity is a critical public service. Any attempt to disrupt supply will be dealt with firmly,” the official said.

Engineers’ unions have separately cautioned that restructuring without a clearly articulated technical and regulatory framework could compromise long-term planning and system reliability, though they have stopped short of calling for an outright shutdown.

Despite ongoing discussions between union leaders, CEB management and government representatives, there is no indication of an early resolution, raising the prospect of a prolonged standoff at one of the country’s most strategically important state institutions.

The dispute unfolds amid Sri Lanka’s IMF-backed reform programme, under which state-owned enterprises — particularly in the energy sector — are under increasing pressure to reduce losses and ease the burden on public finances.

Analysts warn that sustained unrest at the CEB could complicate reform timelines and dent investor confidence, even as the government seeks to signal policy resolve.

A retired CEB top official said: “For now, while major strike action remains legally constrained, the confrontation has once again placed the power sector at the centre of national debate, with consumers and businesses watching closely for any fallout.”

By Ifham Nizam ✍️

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Dumbara Prison being expanded to accommodate nearly 30,000

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Harshana

Of over 37,000 held in country’s prisons, nearly 27,000 are suspects

Dumbara Prison built to accommodate 699 persons is now being expanded to hold 2,900 persons. At the moment, Dumbara Prison holds 2,246 men and women – a staggering 1,547 individuals more than its maximum capacity. Of the 2,246 persons held there, 107 are females.

This was revealed when Justice and National Integration Minister Harshana Nanayakkara responded to a query posed by Samagi Jana Balawegaya (SJB) lawmaker Chamindrani Kiriella, in Parliament yesterday (20).

The Kandy district SJB MP raised a spate of questions regarding the current status of prisons with the focus on how the NPP government intended to address the growing congestion within prisons.

The Minister explained that a major building project was now underway to expand Dumbara Prison, situated at Pallekelle, to accommodate 2,500 men and 400 women.

According to Attorney-at-Law Nanayakkara, the proposed Dumbara Prison complex would include 102 housing units for prison personnel.

The Parliament was told that the entire project would cost the taxpayer a staggering Rs 4.3 bn and that Engineering Consultants (Pvt.) Limited (ECL) was responsible for planning and supervision.

The project was progressing and by January 4, 2026, a substantial part of the complex had been built and 2146 inmates already accommodated.

The Minister said that the facility was to accommodate those who were previously held at Nuwara and Bogambara Prisons.

Of some 37,761 held at various prisons, about 27,000 were suspects, the Parliament was told.

MP Kiriella urged Minister Nanayakkara to consider an arrangement, similar to that of South Africa where those languishing in prisons, due to the inability to pay fines, received the required financial assistance from a special fund created for that purpose.

While appreciating the SJB’ers proposal, Minister Nanayakkara said that during 2025, 17,000 persons hadn’t been remanded as part of the government response to overcome overcrowding in prisons. They were being held under supervision, the Minister said.

Minister Nanayakkara said that the primary reason for the congestion was the significant number of those remanded on narcotics-related charges. Of the over 37,000 held in prisons about 30,000 were those who had been arrested on narcotics-related offences, the Minister said. According to the Minister, delay on the part of the Government Analyst’s Department in furnishing relevant reports had created a crisis and action was being taken to recruit 82 persons to that Department. The idea was to establish a system to secure GA reports within three months, the Minister said.

By Shamindra Ferdinando ✍️

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