President Anura Kumara Dissanayake presented the Government’s maiden Budget to Parliament on February, 17 highlighting its role beyond revenue and expenditure planning. He described it as a blueprint for economic transformation, aiming to empower citizens rather than merely facilitate participation.
He stressed the need to lift barriers that prevent citizens from reaching their economic potential, citing factors such as geographical disadvantages, disability and a lack of education or infrastructure. The Budget prioritises investment in education, healthcare and infrastructure to ensure equal access to opportunities while promoting fair competition and preventing market monopolies.
Dissanayake framed the Budget as the first step towards economic democratisation. However, while the Government has positioned it as a populist move, critics have questioned whether the proposed measures will lead to genuine economic reform. The Sunday Observer sought perspectives from various stakeholders on the new Government’s maiden Budget.
Joseph Stalin – Secretary, Ceylon Teachers’ Union
Reflecting on the concerns of state sector employees, especially teachers and principals, he reminded the Government that it came to power with the support of these groups, particularly those advocating for salary increases. Stalin said the union had demanded a Rs. 20,000 salary boost for public sector employees and the remaining two-thirds of a salary proposal for teachers and principals, which had been partially met.
While the Budget included a Rs. 15,000 salary increase, it fell short of the Union’s expectations and did not address the ongoing salary disparity for teacher principals, he said. Stalin called for urgent Government intervention to resolve these issues.
The trade unionist also highlighted the Government’s promise to allocate six percent of GDP to education, a key demand of educators. He stressed the need for a greater allocation than that provided under the previous Government and pointed out the additional financial burden on parents due to the VAT increase in 2024, which led to rising school supply costs.
While the Budget proposed a Rs. 6,000 per child allocation for book purchases, it would only apply to disadvantaged students in schools with fewer than 300 pupils. Stalin called for a broader program to support all children in need, regardless of the size of the school. “Economic difficulties exist across the entire spectrum of schools, including those in more affluent areas. We need a broader program that would support all children in need,” he said.
The union also criticised the vague proposal for “school restructuring” in the Budget and demanded more clarity. The shortage of teachers in critical subjects such as Science, Mathematics and English remains a significant concern, he added. Stalin called upon the Government to address over 30,000 vacant teaching positions to ensure adequate staffing.
While acknowledging some positive steps, the CTU expressed disappointment with the Budget’s failure to address key issues, urging the Government to take more concrete action for the betterment of public servants and the education sector.
Tania Abeysundara – Chairperson, Sri Lanka United National Business Alliance
Abeysundara expressed her disappointment with the 2025 Budget, criticising it as more aligned with the priorities of the International Monetary Fund (IMF) than the needs of small and medium-sized entrepreneurs.
“The Budget is a populist one and a document reflecting the IMF’s agenda. Despite earlier promises from the Government to prioritise small and medium-sized businesses, the Budget contained no meaningful provisions for these enterprises,” she said. She also spoke of the absence of a clear timeline to implement any proposed measures, leaving entrepreneurs uncertain about when, or even if, they would see tangible changes.
She said that many had submitted suggestions based on their needs but saw little consideration of these ideas in the Budget. While she acknowledged the challenge of finding solutions outside the IMF framework, Abeysundara stressed the need for alternative proposals better suited to the country’s needs.
The Budget’s focus on increasing salaries, though not opposed by the business community, was another point of contention. “The rise in private sector salaries, combined with overtime allowances, would significantly increase the monthly expense for businesses. This would, in turn, increase the financial burden on employers who would be required to contribute more to employee benefits such as the Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF),” she said. She added that the re-introduction of the Parate law after March 31 would add further strain, requiring business owners to pay loan interest and the capital, complicating their ability to manage operations.
Abeysundara also raised concerns about the Government’s plan to recruit 30,000 new public sector employees, particularly graduates, urging that these individuals be directed to the private sector instead. She said that there were ample job opportunities in the private sector if the right environment was created and graduates were equipped with the necessary tools.
With Sri Lanka already having one of the largest public services in Asia, she said that expanding the public sector further would not benefit the economy.
Abeysundara said instead of receiving the support they had hoped for, small and medium-sized entrepreneurs have found little relief in this year’s Budget, leaving them to continue bearing financial burdens without any real solutions in sight.
Vimukthi Dushantha – Convenor, All Island Bus Passengers Association
Dushantha speaking to the Sunday Observer expressed a mixture of optimism and concern regarding this year’s Budget proposals. He welcomed the Government’s plan to deploy 100 new buses on three main roads in Colombo and to expand the Sri Lanka Transport Board as a positive step in tackling the city’s chronic traffic congestion.
Dushantha said that improving public transport is the key to resolving this issue, highlighting the importance of encouraging people to move from private vehicles to public transport. “Introduction of modern, air-conditioned buses could entice commuters currently relying on private cars. This is a promising development. There must be an increase of such buses next year which will pave the way for further progress,” he said.
Dushantha also commended the Budget’s proposal to enhance the Kelani Valley line beyond Avissawella, calling it a significant improvement for the country’s transport infrastructure. However, he highlighted some key shortcomings. He criticised the proposals for not being comprehensive enough to address the transport sector as a whole and called for a national policy to cover the full scope of the sector.
However, he raised the need for a stronger focus on passenger safety. While the Government has previously prioritised safety in buses and trains, he said that security concerns have now extended to other forms of transport, including taxis where passengers have faced threats.
He highlighted the lack of legal provision to protect passengers and called for a new Passenger Safety Act. Despite the existence of the Road Transport Authority to oversee passenger safety, he criticised its ineffectiveness, saying that it fails to address the real issues. He called for a new legal framework to ensure the safety of all passengers, which he felt had been overlooked in the Budget.
While acknowledging positive proposals, such as the renovation and local production of train carriages, Dushantha expressed disappointment that the Government’s policy statement, “A Beautiful Country, a Rich Life,” did not address passenger safety within the context of transportation. He said that although the Budget presented some promising ideas, its failure to take a comprehensive approach regarding the transport sector, particularly regarding passenger safety, remains a significant shortcoming.
Saliya Peiris PC – Former President, Bar Association of Sri Lanka
Saliya Pieris PC raised several important concerns about the legal reforms outlined in the 2025 Budget. While he acknowledged that, as is customary in every Budget, a portion of funds is allocated for legal reforms, he underscored a critical issue, the actual implementation of these reforms is often questionable.
Pieris highlights that although legal reforms are mentioned and figures are provided in the Budget, the real challenge lies in whether these funds are effectively utilised for their intended purposes. There is often a noticeable gap between the amounts allocated for reforms and the actual sums spent on related activities and this discrepancy significantly hinders progress.
He said that this issue is particularly pronounced when it comes to the creation of new institutions. According to Pieris, the problem is not just about setting up these institutions but also ensuring they are effectively integrated into the existing Government framework to function efficiently.
He said that while the Budget may contain promising goals and lofty statements, the real test is in the Government’s ability to deliver on these commitments and turn them into tangible results.
In his view, the success of the legal reforms in the 2025 Budget will not be determined by the figures presented on paper but by the Government’s capacity to implement these reforms effectively. Without a genuine commitment to action, the financial allocations in the Budget will remain mere numbers, failing to bring about any meaningful change.
Dr. Chamil Wijesinghe Media spokesman, Government Medical Officers Association
Dr. Chamal Wijesinghe of the Government Medical Officers Association (GMOA) provided a comprehensive analysis of the 2025 Budget, focusing on key issues related to the health sector and salary revisions.
He expressed optimism about the record funding allocated to healthcare, highlighting the Rs. 185 billion earmarked to purchase medicine, which he described as a much-needed step to ensure the continuous availability of essential medication. “This is the highest allocation in Sri Lanka’s history,” he said, stressing the urgent need given the critical state of the country’s health system.
Despite this positive move, Dr. Wijesinghe called for the improvement in the procurement process to ensure that medicine is delivered efficiently and systematically to the public. He welcomed proposals to digitise the health system and strengthen programs targeting infectious diseases, viewing these as promising for the future of public health.
On salary revisions, Dr. Wijesinghe acknowledged the positive aspect of raising basic salaries in line with the National Salary Policy, a step the GMOA had long advocated for. However, he voiced concerns over the reduction in the value of additional duty allowances (ADAs) for doctors, a crucial part of their income, particularly for those working in life-saving situations.
“The reduction in ADAs is causing unrest,” he said, adding that doctors are limited to a maximum of four hours of additional duty per day, or 120 hours per month. This change, combined with the reduction in holiday allowances, has created frustration within the medical community.
Dr. Wijesinghe also stressed on the severe shortage of doctors in Sri Lanka, saying that the country’s hospitals cannot function effectively without adequate medical staff. While the Budget increased hospital funding, he said that this would not address the root issue without a clear plan to retain doctors.
“No matter how much we allocate to hospitals, they cannot run without doctors,” he said. The GMOA had proposed various measures to retain medical professionals, such as updating allowances for intern doctors, offering postgraduate training for specialists and increasing monthly allowances. Unfortunately, none of these proposals were included in the formal Budget plan.
“While some of these initiatives might be implemented outside the budgetary framework, we had hoped for more concrete steps within the Budget,” he said. Dr. Wijesinghe expressed hope that further discussions with the Minister of Health and the President would lead to the development of a formal plan. “We will continue working towards a program aimed at improving the situation for doctors in Sri Lanka,” he said, emphasizing the need for more attention to the long-term sustainability of the medical profession.
Velaudam Weerasingham Activist
Velaudam reflected on the ongoing struggles of estate workers for better living conditions, education, healthcare, and fair wages and emphasized the vital role estate workers play in Sri Lanka’s economy, particularly in the tea industry, but noted their long-standing denial of basic rights.
Weerasingham highlighted the battle for higher wages, which began in 1945, and criticised the Government’s recent salary proposal of Rs. 1,700, falling short of the promised Rs. 2,000. He also raised concerns about the Rs. 1,350 increment implemented during Ranil Wickremesinghe’s tenure, which only applied to registered estate workers, an almost non-existent category due to the lack of registration. Estate workers, he said face extreme exploitation with no legal protections, often working under contracts that deny them basic rights.
He proposed that estate workers be given land to engage in plantation activities, similar to small tea estate owners in the South, to address the ongoing issues. He also criticised the Budget allocation for estate infrastructure, saying that the Rs. 4,267 million designated for around 250,000 estate families would not realistically meet the needs of these communities.
Reflecting on the 1993 privatisation of the estates under former President Chandrika Bandaranaike Kumaratunga, Weerasingham condemned the loss of basic rights for estate workers and proposed separating estate communities from estate companies, transferring management to Divisional Secretariats to ensure equal rights for workers. On education, he welcomed the Budget’s vocational training allocation but criticised the lack of bilingual programs in the hill country, where Tamil-speaking workers are excluded from training opportunities.
He pointed to the exclusion of estate hospitals from the national healthcare system, noting their privatisation and lack of basic facilities. He called upon the Government to integrate these hospitals into the national system, ensuring estate workers receive the same healthcare as other citizens. He also highlighted the disparity in the quality of roads as estate roads were managed by estate companies rather than the Government, creating further hardships for workers.
Weerasingham also stressed the need for a formal program to address domestic violence in the estate sector, calling for action to protect women from abuse. He expressed regret over the lack of a comprehensive plan for estate workers in the 2025 Budget, seeing little progress for the marginalised group.
Madhushan Chandrajith Convenor, Inter-University Students’ Federation
Convener of the Inter-University Students’ Federation Madushan Chandrajith said the Budget reflects the influence of the International Monetary Fund (IMF) and its prescribed policies. He said that the Budget has been formulated in response to IMF demands rather than addressing the genuine needs of the Sri Lankan people, which aligns with the union’s ongoing opposition to the IMF’s role in the country’s economic decisions.
Chandrajith said that while the Government claims that the Budget was meant to benefit all citizens and involve them in the economy, the reality is that taxes are being imposed without a clear or fair system for distributing the benefits. He criticised the Government’s focus on market competition, which he said prioritises corporate interests over providing comprehensive solutions to the public. This, he said, contradicts earlier political promises to challenge neo-liberal policies, which now seem to have been abandoned in favour of adhering to global financial organisations’ demands.
He acknowledged that the proposed increase in allocations for education, health, transport and security, but contended that these increases were insufficient to address the deep structural deficiencies in these sectors. Chandrajith emphasised on the severe shortage of resources in education, noting that while the union has continuously called for six percent of the country’s Gross Domestic Product (GDP) to be dedicated to education, the Budget allocation was only three percent. He acknowledged that the increase may not be immediate due to the current crisis but stressed the importance of prioritising education for the country’s future.
One of Chandrajith’s major concerns was the sharp increase in security spending, which he viewed as an attempt to strengthen the State’s ability to suppress the people. He said the Government was elected to serve the public’s interests and should not prioritise expanding its security apparatus, especially when the public is already struggling. He expressed concern that this emphasis on security would further alienate the Government from the people.
Turning to the allocation to universities, Chandrajith said there was a significant disparity in funding. While Rs. 10.5 billion has been allocated for 19 State universities, Rs. 11.3 billion has been set aside for just two institutions—the Kotalawala University and the South Asian Institute of Technological Development. He criticised this prioritisation and said that it undermines the funding of State universities, which serve the majority of students.
Chandrajith also lamented the Budget’s failure to address the IUSF’s proposals, particularly regarding the taxation of education expenses. He had hoped the Budget would reduce the VAT on educational costs to zero percent but instead, it offers a meagre allowance to a select group of people, which he said does little to alleviate the financial hardship faced by most students and their families. He also expressed disappointment that the Mahapola Scholarship, which has remained at Rs. 5,000 since 2015 was not increased, despite the rising cost of living. The Union had proposed raising the amount to Rs. 10,000 to help students cope with increased living expenses, but this request was ignored in the Budget.
Chandrajith said from the ISUF’s perspective, the 2025 Budget failed to meet the needs of students and the public at large. He reaffirmed the Union’s commitment to continuing their struggle for a fairer, more equitable Budget, asserting that the fight for the unmet needs of students and the broader public would continue.
Rohan Abeywickrama – President, Association of Small and Medium Enterprises Tourism in Sri Lanka
Drawing from his 40 years of experience in the tourism sector, Abeywickrama acknowledged some positive aspects of the 2025 Budget but expressed disappointment over the lack of significant changes, especially for small and medium-scale tourism operators like himself. One key expectation, a reduction in the VAT component, was not addressed in the Budget.
Abeywickrama said that the VAT burden faced by small operators, adding that businesses in the tourism sector, such as his, often have to hire buses for transporting tourists, but these bus companies are not VAT-registered. As a result, tourism operators end up paying the 18 percent VAT on behalf of the bus companies and have to collect this VAT from clients, adding unnecessary financial strain.
He said that the Government benefits significantly from tourism, yet does not offer adequate relief to the sector. “The Government receives substantial income from tourism, so it should offer more support,” he said. He said that the current system does not distinguish between large and small tourism operators, treating all institutions equally regardless of their size, which he said overlooks the unique challenges faced by small businesses.
Abeywickrama said that small-scale operators often bear significant personal costs when attending global conferences and exhibitions. He called for more targeted programs that support small and medium-sized businesses, which he believes are the backbone of the tourism sector. “The private sector, not the Government, runs almost all aspects of the tourism industry in Sri Lanka,” he said, pointing out that small and medium operators contribute to foreign exchange and employment.
Abeywickrama expressed frustration with the Government’s failure to address the needs of small and medium-scale operators, calling for greater support and equitable treatment. “The Government must recognise the vital role small businesses play in the success and sustainability of Sri Lanka’s tourism industry,” he said.
