President Anura Kumara Dissanayake is currently presenting the 2026 Budget in Parliament, outlining a reform-focused and inclusive policy framework. The proposals emphasize fiscal discipline, digital transformation, and social welfare, with targeted investments in health, education, infrastructure, and support for vulnerable communities.
Macroeconomic & Fiscal Direction:
The 2026 Budget aims to reduce the deficit to 5.2% of GDP, with state revenue expected to rise to 15.3% by 2026. The government targets reducing the debt-to-GDP ratio to 95% by 2026 and further to 87% by 2030, while maintaining inflation below 5%. Economic growth is projected at 7% annually, driven by productivity and investment. A competitive bidding system for public procurement, e-procurement, and digital asset management will be introduced in 2026 to enhance transparency.
Public Sector Employment & Benefits:
All temporary employees who have served over six months will receive permanent appointments. Rs. 110 billion has been allocated for the second phase of the 2025 salary revision and Rs. 20 billion for pension adjustments. The distress loan limit for public servants increases to Rs. 400,000, and the festive advance rises to Rs. 15,000. The government also plans to recruit 75,000 new employees for technical, revenue, and law enforcement roles.
Housing & Urban Development:
Significant allocations support urban housing and low-income families, including Rs. 15 billion for Colombo housing projects and Rs. 3 billion for 70,000 houses under the “A Place of Your Own – A Beautiful Life” program. India-assisted housing projects for estate workers and urban development in 10 cities are also planned.
Roads, Transport & Connectivity:
Rs. 34.2 billion has been allocated for road development, with priority to expressway projects and rural connectivity. The Sri Lanka Transport Board (SLTB) will receive Rs. 3.6 billion for 600 new long-distance buses and Rs. 3.3 billion to procure new train sets.
Agriculture, Livestock & Irrigation:
A total of Rs. 91.7 billion is set aside for irrigation, including major restoration projects. Additional allocations support livestock breeding, milk production, and renewable energy in agriculture.
Fisheries & Coastal Development:
The budget allocates Rs. 350 million for the Valaichchenai Fishing Harbour and funds for modernizing fishing infrastructure, aquaculture, and safety equipment for fishermen.
Health, Social Welfare & Inclusion:
Investments include Rs. 11 billion for new medical faculties, Rs. 4.2 billion for the Suwasariya Ambulance Service, and Rs. 1.5 billion for nationwide Primary Healthcare Centres. New allowances for thalassaemia patients and differently-abled students are also introduced, while the Mahapola Scholarship is increased by Rs. 2,500.
Employment, SMEs & Women’s Empowerment:
SME loans, self-employment support, and women’s entrepreneurship programs receive Rs. 7 billion in total allocations. Estate workers’ daily wages will increase to Rs. 1,750 by January 2026. A pension scheme for overseas workers will also be launched with Rs. 2 billion from the Foreign Employment Bureau.
Digital Transformation & Innovation:
The government will digitalize all payments, introduce digital ID cards by March 2026, and establish a Virtual Economic Zone to attract investment. Broadband vouchers will be offered to students, and Rs. 6.5 billion will fund the “Clean Sri Lanka Initiative.”
Governance & Reform:
Public bungalows will be converted into PPP ventures, a new residence visa system will be introduced, and a Judicial Code of Ethics will be drafted. President Dissanayake reaffirmed his administration’s commitment to transparency, declaring zero tolerance for corruption.
Overall, the 2026 Budget positions Sri Lanka on a path toward fiscal stability, economic modernization, and inclusive growth, marking a significant step in the nation’s post-crisis recovery.
