Business
Public finances put the government in a tight spot

‘Can’t spend more than Rs. 4,219 billion for 2025’
‘Low GDP forecast is one of the main constraints’
Minister says,’govt is navigating the challenges’
By Sanath Nanayakkare
The management of public finances in 2025, has thrown a huge challenge at the government, according to Prof. Anil Jayantha Fernando, Minister of Labour and Deputy Minister of Economic Development.He went on to say that the government is taking a broader perspective of the prevailing situation and is navigating the challenges well.
“Although we have enough money now, we can’t spend more than Rs. 4,219 billion for the fiscal year 2025”, he stated on January 17, 2025, delivering the keynote address at the 11th edition of the First Capital investor Symposium, held at Cinnamon Grand, Colombo.
“The period available for us to come up with the Budget creates a lot of constraints, and in addition, system embedded constraints are also there. The main constraint is the forecasted GDP for 2025. It has been calculated based on economic variables and past trends. The growth rate in 2024 was 2.1% and the expected real GDP growth for the next 4 – 5 years is around 2-3%. Because of these low expectations, the GDP expectations for 2025 have been confined to Rs. 33 trillion rupees. Other primary spending is subject to this cap. 13% of expected GDP is the cap for revenue expenses. No matter we have enough money now, we can’t spend more than Rs. 4,219 billion for 2025,” he said.
“That is a bit of a challenge for us. There is a ceiling for capital expenses which is 4% of the GDP. It comes to about Rs. 1,320 billion. We can increase that by reducing revenue expenses. But you can’t reduce each expense that much because the bulk of the revenue expenses comprise state salaries, pensions etc. So, there is very little fiscal space, but when it comes to capital expenses, there is some space there. Some of these expenses are incurred by ongoing projects. We were able to repurpose some of the ongoing projects for this year, and we managed to incorporate some [new] capital expenditure; in other words, the items that we had presented in our manifesto, into this space. Anyway, I would like to mention that 2025 will be a challenging year. After all, depending on the success we are going to achieve in 2025, there will be a comfortable position for us at the next [IMF]review and discussions in the future,” he said.
Speaking about the investment landscape, he said, “Our government was given a different mandate. It has been perceived differently by different segments of the country. The individuals of society is oriented towards maximizing their own wealth from investments, but not all individuals in society can gain from them in an equitable manner. So, the government wants to act as an instrument in striking a balance between individual interests and public interests. We will take that mandate from that perspective and act as true agents of the masses without creating any conflicts of interest. Our policy decisions and activities will be driven towards upholding the public interest over private interests.”
“People may have different perceptions about our government. That may be why sometimes there is a sentiment in society that the new government is not doing anything. They talk about the price of commodities remaining at the same levels, or even higher. Of course, we need to solve these. However, as a responsible government, we need to look at things in a broader perspective.”
“Political stability is now in place. We have been managing fiscal stability as per the [IMF] benchmarks. But we still need to broaden the taxbase and optimize tax administration. When it comes to financial stability, we are seeing a normal yield curve and the interest rate is also coming down gradually. That is reflected in the forex market as well.”
“We have a big target for foreign exchange reserves this year and in the coming years. The signs indicate that we will be able to achieve it despite challenges in the way. Allowing motor vehicle imports is necessary as the economy is reviving and that will be another challenge that we have to deal with.”
“Social stabilization also needs a lot of focus as a large majority of the masses are struggling. We have taken measures to iron out this situation to some extent. We are contemplating on giving more targeted benefits to the vulnerable segments.”
“The Opposition would say that we are inexperienced, but we have that political experience, and we are in a learning process. And that learning would help us take things in the right direction.”
“A rift can occur when the financial system stability is not connected to the real economy and when it is not driven by the economic fundamentals. We need to bring about a robust and vibrant capital market in the future. When we have an alienated financial sphere and operate it in such a manner, it could lead to market bubbles and consequently to inevitable crashes. So, we need to see how best we can share accurate and credible market information without leaving room for irregularities, insider trading and so on. The government’s objective is to create a capital market where accurate information is freely available and with one’s competence and talent, they can identify suitable investment vehicles and channel their savings into the right portfolios. When only a few have exclusive information about the goings-on in the capital market, that is not democratic. This is where new technology should be deployed to bridge that gap.”
“It appears that the political, economic, financial and techno spheres are making their own separate journey. Our vision is to converge these spheres as much as possible, so that the capital and financial markets can link to create capital formation by attracting more savings.”
“The government will create such a conducive environment for capital formation to help energize the economy where national savings will be channeled into investments.”
“The capital market’s efficiency should not be compromised by the adverse elements I mentioned earlier. We think that market efficiency is not up to the mark at present. For example, the extraordinary performance of the stock market shows increased confidence in investors because of the policies of the government, but I won’t say that this was only because of government action,” the minister said candidly.
At the dinner-time networking following the First Capital Investor symposium, a participant was heard telling a friend, “We’d better have some money ready to invest in short-tenor government securities which might generate rising yields.”
Business
UNDP, ADB pledge support to SL on its public digital journey at key summit

Privacy challenges in the rollout of digital ID scheme also come into focus
By Sanath Nanayakkare
Key officials of the United Nations Development Programme (UNDP) and Asian Development Bank taking part in the Sri Lanka Digital Public Infrastructure (DPI) Summit in Colombo said yesterday that they would support Sri Lanka to become a digital economy powerhouse in the region.
The Ministry of Digital Economy had put together this two-day summit in partnership with the UNDP in Sri Lanka, the ADB and key collaborators including Huawei.
The Summit’s first session underscored the critical role of DPI as an enabler in building the country’s digital economy with universal DPI safeguards embedded to ensure safety and inclusion.
With transparency, safety and inclusion prioritized, the Summit 2025 brought together global leaders, key experts, innovators, and stakeholders from diverse sectors for dialogue and action on existing challenges and opportunities around DPI to accelerate economic growth and progress on the Sustainable Development Goals.
Key participants in the opening session included: Eranga Weeraratne, Deputy Minister of Digital Economy; Dr. Hans Wijayasuriya, Chief Advisor to the President on Digital Economy; Antonio Zaballos, Director, Digital Sector Office, ADB; Azusa Kubota, Resident Representative, UNDP Sri Lanka; Srikanth Nadhamuni, Founder CTO, Aadhaar; Keyzom Ngodup Massally, Head of Digital & AI Programmes, UNDP Chief Digital Office; and other high-level representations from the public and private sectors.
Eranga Weeraratne, Deputy Minister of Digital Economy stated that the government envisions Sri Lanka’s digital economy to reach $15 billion by 2030.
The eminent speakers emphasized the importance of public-private partnerships and cross-sector collaboration in successfully designing and implementing DPI at population-scale, particularly with the necessary safeguards to anticipate and mitigate risks.
Dr. Hans Wijayasuriya, Chief Advisor to the President on Digital Economy said, “The primacy given to Digital Economy Acceleration by the Government of Sri Lanka is exemplified by the creation of the Digital Economy Ministry under the direct purview of His Excellency the President. The Ministry is committed to building a robust digital economy that benefits all citizens. Our goal is to use digital transformation to accelerate economic growth, achieve leapfrog elevation of Citizen and Business Services and eliminate asymmetries across the socio-economic pyramid. The establishment, and accelerated adoption of DPIs is a foundational pillar of this strategy. We are confident that the DPI summit will bring together the effort and commitment of likeminded stakeholders to support the achievement of Sri Lanka’s Digital Economy ambitions.”
Dr. Hans said on a lighter note that when he was in the telco industry , his main focus was ‘customer experience’ and now in his new capacity , his focus would be on ‘citizen experience’.
Takafumi Kadono, ADB Country Director for Sri Lanka commented, “Digital Public Infrastructure is an essential enabler of Digital Transformation. As our economies and societies digitalize, Government is called upon to provide the high-speed digital rails and competencies that this requires. We at ADB look forward to supporting Sri Lanka’s ambitions to become a Digital Economy Powerhouse.”
The ‘Transforming Local Administrative Data Collection Systems for SDG Acceleration in Sri Lanka’ project was highlighted during the event. Led by the Government of Sri Lanka, implemented by UNDP Sri Lanka and the World Health Organization (WHO) in SriLanka, and funded by the UN Sri Lanka SDG Fund, the project demonstrates Sri Lanka’s commitment to leveraging DPI for improved service delivery, economic efficiency, and citizen empowerment as a first mover country of the 50-in-5 global campaign.
Speaking at the Summit, Azusa Kubota, Resident Representative, UNDP in Sri Lanka noted, “Digital platforms can contribute greatly to building trust between government institutions and citizens by enhancing accessibility, transparency, safety, and responsiveness of services. As part of our commitment to advancing accountable institutions for SDGs attainment, UNDP, globally and locally here in Sri Lanka, supports designing national policy frameworks, building capabilities for digital adoption, as well as introducing tangible digital solutions for improved public service delivery. As Sri Lanka spearheads digitalization, this inaugural Summit is a pivotal step in Sri Lanka’s Digital journey.”
Keyzom Ngodup Massally, Head of Digital & AI Programmes, UNDP Chief Digital Office notably spoke about the Kenyan case when it came to digitalization of its national ID programme, and gave her insights on the robust privacy framework and universal safeguards that would be critical in the whole digitalization exercise.
A landmark ruling by the High Court of Kenya in 2021, concluded that the rollout of a country-wide biometric ID scheme was illegal. Kenya’s digital identity rollout was paused for the third time by the country’s High Court in July 2024, pending the outcome of a constitutional challenge.
Business
SDC and partners to impement initiatives to bolster Sustainability Standards and Reporting of the Sri Lankan apparel and textile sector

In support of its efforts towards promoting grater participation of the private sector in Sri Lanka’s inclusive and sustainable growith trajectory aligned with the Sustainable Development Goals (SDGs), the Sustainable Development Council recently facilitated a mission from the Global Reporting Initiative (GRI) – South Asia Network with the aim of strengthening the capacities of Sri Lankan businesses in the Textile & Apparel sector on sustainability standards and certification, risk management and reporting based on the globally accepted GRI frameworks,
Sri Lanka holds a key position in the global fashion industry supply chain as an ethical sourcing destination for apparel and fashion. However, against the growing global demands for stricter policies and practices assuring higher environmental and social safeguards, Sri Lankan businesses in the apparel and textile sector will need to adopt new initiatives to improve productivity, reduce environmental impact to continue to retain its prominent and respected position in the global apparel supply chain and push into new markets which are demanding and ready to pay a premium for ethically and sustainably manufactured apparel products. According to Market Research Future (2023), the global market for sustainable textiles is expected to grow at a compound annual growth rate of 12.5% between 2022 and 2030, reaching nearly USD 69.5 billion in 2030.
GRI is an independent international organization providing standards, tools and training to organizations of all sizes to harness the skills, capabilities and data to create sustainable, long-term value and unlock positive change. GRI standards are among the world’s most widely accepted sustainability reporting framework. Headquartered in Amsterdam, Netherlands, GRI has a network of five regional networks through which it supports organizations and stakeholders worldwide.
Based on the discussions with SDC held through 2024, Sri Lanka was included in the ‘Improving Transparency for Sustainable Business (ITSB) Programme’ to be implemented by GRI in India, Bangladesh and Sri Lanka with the support of the Swedish International Development Cooperation Agency (SIDA). The Programme aims to build the capacity of businesses to meet market and regulatory requirements while improving practices in labor, economic impact and tax and sustainability reporting among others.
During the mission, extensive consultations were held with SDC and its partner agencies from government, the Ministry of Industries and the Export Development Board and industry stakeholders represented through the Joint Apparel Association Forum (JAAF), Sri Lanka Apparel Exporters Association and ESG Professionals Association to agree on priority interventions for Sri Lanka through 2025 to 2027.
Accordingly, capacity building sessions would be conducted for 100 apparel and textile sector companies in Sri Lanka based on an assessment of current capacities on materiality assessments and impact reporting during 2025. As next step, it is expected to create digital reporting platforms to integrate SMEs in the textile and apparel sector into impact reporting practices through simplified approaches.
The above interventions are expected to strengthen the ability of Sri Lankan businesses in the apparel and textile sector to create value for employees, customers, communities and the environment whilst also enhancing their ability to access new market opportunities in the fashion industry.
Business
Superior quality feed boosts bottom line

Sustainability, poultry modernization, feed costs optimization and animal nutrition took center stage at the U.S. Soybean Export Council (USSEC)’s signature Chickenomics event in Kathmandu, Nepal.
South Asia’s poultry industry continues to show a preference for U.S. Soy, using it as a key feed ingredient. With its high energy and protein levels, U.S. Soy consistently provides superior quality while lowering feed costs and improving profitability. This event comes at an opportune time as U.S. Soy’s prices are competitive in the global marketplace.
U.S. Soy has achieved some significant milestones in the region in recent months. Pakistan reopened trade after a two-year pause easing market access. In Nepal, key poultry producer Valley Group has signed on to use the “Fed with Sustainable U.S. Soy” label on its packaging, underscoring the value it places on sustainability. According to data from USDA, U.S. soybean imports to Bangladesh are up by 36.2% compared to last year. India also has 111,500 MMT of outstanding sales for U.S. soybean oil reflecting U.S. Soy’s growing presence in the region.
Commenting on this surge in U.S. Soy imports, Kevin Roepke, USSEC’s Regional Director for South Asia and Sub-Saharan Africa (SAASSA) added, “2025 has started strong for U.S. Soy. We are grateful for our customers across the region who recognize the potential that U.S. Soy holds in advancing the region’s food and nutrition security. We are confident that this will be a turning point in strengthening our partnerships with the industry.”
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