17/02/2025
*CSE Market News | 17-FEB-2025 | National Budget 2025 Highlights*
*Economy*
🔸Economic growth is expected to be maintained at 5% for 2025.
🔸Total government expenditure is projected at LKR 4,2Tn and a primary surplus of 2.3% of GDP is expected.
🔸The tax policy measures are expected to deliver the required revenue to enable Sri Lanka to meet the revenue targets of 15.1% of GDP in 2025.
🔸For the year 2025, the bulk of revenue gains is expected to be delivered by the liberalization of motor vehicle imports that took place on 1st February 2025.
🔸The government decided not to pursue the Imputed Rental Income Tax that had been agreed by the previous administration.
🔸Export revenue of USD 19Bn is expected in 2025.
🔸The Economic Transformation Act will be amended.
🔸A new Act will be introduced on Public-Private Partnerships.
🔸A new Customs Act will be introduced by amending the present Act.
🔸The proposed Sri Lanka Electricity (Amendment) Act will be introduced soon.
*Healthcare*
🔸The highest-ever allocation of LKR 604Bn has been allocated for the health sector.
🔸LKR 185Bn to allocated for purchase of drugs and medical equipment.
*Education*
🔸LKR 135Bn has been allocated for the development of the university system.
🔸Mahapola installment to increase from LKR 5,000 to LKR 7,500 and the monthly allowance awarded to Grade 5 students to be increased from LKR 750 to LKR 1,000.
*Construction*
🔸LKR 250Mn will be allocated for the preliminary work of the proposed expansion of the Kelaniweli railway line from Avissawella to Ratnapura.
🔸LKR 1,000Mn will be allocated for the development of rural bridges, and LKR 5,000Mn will be allocated for rural roads and bridges in the Northern Province.
🔸LKR 1Bn will be allocated to commence the construction of the Vadduvakal Bridge.
🔸LKR 3Bn is allocated for improvement and rehabilitation of rural roads.
🔸LKR 4,267Mn is allocated for development of estate housing and infrastructure development.
🔸LKR 2,450Mn is allocated for Vocational training, Livelihood development and Infrastructure Development of Malayagam Tamil youth.
🔸LKR 866Mn is allocated for smart classrooms for schools in the Malayagam Tamil community.
*Digitization*
🔸LKR 3Bn will be allocated for digital development.
🔸The new Digital ID will be introduced rapidly, says President AKD. He also said that a new legal framework for digital payments will be introduced. The concept of 'all services from one place' is being created with the necessary approvals for the steps required to digitize public services.
*Export/Import and Trade*
🔸LKR 1Bn will be allocated for upgrading scanning services at the Colombo Port and Katunayake Bandaranaike International Airport.
🔸The President stated that they were working on a long-term solution to port congestion, needed a national quality management system, and were allocating LKR 750Mn that year to achieve the goal.
🔸2025 Budget Proposals on expanding export of goods and services: - National Tariff Policy and a new Customs Act will be introduced.
🔸Steps will be taken to Expedite the commencement of the Second Terminal at Katunayake Airport with Japanese Assistance.
*Tourism*
🔸Government to launch digital ticketing for tourism and allocates LKR 500Mn.
🔸LKR 500Mn will be allocated to develop new tourist locations such as Anuradhapura and Yapahuwa.
🔸Allocate LKR 300Mn to hold a “National Cultural Festival”. This festival will be initiated in November and launched in December.
*Banking and Finance*
🔸A new development bank for the SME sector will be established under the existing state banking system.
🔸Rs 15Bn to be allocated to offer higher interest rates for senior citizens.
*Women and Child empowerment*
🔸LKR 7.5Bn has been allocated for the supply of nutrition packs for pregnant mothers, and LKR 5Bn has been allocated for the supply of Thriposha.
🔸LKR 1Bn has been allocated to supply meals for school children.
*Agriculture*
🔸LKR 35Bn has been allocated for the supply of fertilizer in 2025.
🔸LKR 5Bn allocated for Purchasing Paddy during the Maha Season.
🔸LKR 78Bn will be allocated for the development of the country's irrigation sector.
🔸The Northern Coconut Triangle has been identified. LKR 500 Mn will be allocated for its development.
*Industries*
🔸LKR 2.5Bn will be invested in the development of the dairy sector in the country.
🔸LKR 200Mn to be allocated for the Development of freshwater fishing industry.
*Energy*
🔸Sixty-one oil tanks in Trincomalee will be developed in collaboration with international partners.
*Social Welfare*
🔸LKR 232.5Bn will be set aside for Social Welfare (Aswesuma).
*Public Sector*
🔸Government proposes to increase the minimum monthly basic salary from LKR 24,250 to LKR 40,000 by LKR15,750.
🔸The minimum annual salary increment of LKR 250 will be increased to LKR 450.
🔸Of the total net salary increase, Rs.5,000 and 30% of the balance amount will be paid starting from April 2025, with the remaining 70% being paid in equal portions beginning in January 2026 and January 2027. Therefore, it is proposed that Rs.110 billion be allocated for the proposed salary increase in 2025.
*Private sector*
🔸Employers' Associations have already agreed to increase the monthly Minimum Wage to the Private Sector workers from LKR 21,000 to LKR 27,000 in April 2025 and to LKR 30,000 from 2026.
🔸The government will intervene to increase the daily wages of the workers to LKR 1,700.
*Sri Lankan Airlines*
🔸The Government would sign an agreement with banks and set aside LKR 10Bn for loan capital repayment in 2025 as well as LKR 10,000Mn for interest payments.
*General*
🔸LKR 500Mn to be allocated for railway transportation modernization.
🔸SLTB will add 200 low-bed passenger buses for its fleet through its own funds. These buses will be operated under newly established companies collectively known as Metro Bus Companies (MBC).
🔸LKR 300Mn allocated for improvement of approximately 5,611 km of electric fencing, with 1,456 km identified for refurbishment.
🔸The government will implement a strategic recruitment plan to hire 30,000 individuals in essential public service roles. Accordingly, it has been proposed to allocate LKR 10Bn for this purpose in 2025.
🔸Pensions for all pensioners who retired before 01.01.2020 will be revised in three phases, based on the salary scales applicable for the year 2020, as per Public Administration Circular No. 03/2016.
