By: Staff Writer
November 09, Colombo (LNW): In a sharp and uncompromising address to Parliament, Harsha de Silva, MP for the Samagi Jana Balawegaya (SJB) and noted economic expert, delivered a blistering critique of the 2026 Budget proposals. According to Dr. de Silva, the document represents not a fresh vision for Sri Lanka’s economy, but a recycled agenda that falls far short of voter expectations and national needs.
From the outset, Dr. de Silva acknowledged that the government has managed to maintain macro-economic stability achieved by its predecessor. Yet he argued this achievement is hollow without a clear plan for growth. “This budget is not a ‘system change’; it is ‘the same old thing’ wrapped in a new flag,” he declared. According to him, the real substance of the Budget betrays the very electorate that granted the government its mandate.
One of the most trenchant criticisms centred on what Dr. de Silva referred to as the “1 Trillion Rupee Deception.” He asserted the Treasury is sitting on a windfall of around Rs 1 trillion largely from unexpected vehicle-import taxes yet instead of channeling relief to households and small businesses, the government is widening the tax burden. By lowering the VAT threshold from Rs 5 million to Rs 3.6 million per month, he claimed, the Budget hits small enterprises and raises concerns about fairness and regressivity in the tax system.
The housing programme was also described as a mockery rather than meaningful relief. Under the 2026 proposals, the allocation of Rs 10.2 billion to build 7,000 houses translates into about Rs 1 million per home. With construction costs at roughly Rs 10,000 per square foot, Dr. de Silva observed, such funding might buy only a 100-square-foot structure “this is not a home; it is an insult,” he said.
Another spotlight in his critique was the housing loan for state employees: the budget earmarks just Rs 500 million, which, when divided among 1.4 million workers, means aid for only 416 persons “not policy; it’s a lottery,” he charged. Dr. de Silva said the government’s failure to address crippling taxes on construction materials (49% on cement, 60% on fittings, 92% on PVC pipes) undermines any real progress on housing.
On the borrowing front, the minister’s claims of change rang hollow for Dr. de Silva. The Budget plans to borrow Rs 3.8 trillion in 2026 (over Rs 3,110 billion domestically and Rs 700 billion externally) clearly, he argued, a continuation of old habits rather than reform. He said that while the government claims credit for stabilisation (inflation down from 17% to 1%; USD from Rs 370 to Rs 294), the rupee is now depreciating again, currently hitting Rs 307.
Dr. de Silva reserved particular criticism for the youth and SME sectors. The “five simple dreams” of young voters jobs, tax relief, support for freelancers, a relief bank for SMEs, and dismantling the “rice mafia” were, he said, largely ignored. Freelancers previously paying no tax now face 15%; SMEs still await the promised support bank; and job creation in the public sector remains on hold.
Regarding foreign investment and exports, he dismissed government claims of US $823 million in new FDI as misleading; over half, he pointed out, comes from old agreements, including a US $229 million deal with Adani Ports & SEZ Ltd. Meanwhile, exporters face crisis after the removal of SVAT refunds and the silence on trade deals such as Regional Comprehensive Economic Partnership (RCEP) and ECommerce Trade Agreement (ECTA), showing “no political will to walk the talk.”
In closing, Dr. de Silva’s analysis leaves little doubt: the 2026 Budget is a failure of ambition and substance. It does not respond to the real needs of youth, elderly, SMEs, or exporters; instead, according to him, it perpetuates the system that voters sought to transform. With credibility eroded and promises unkept, the biggest casualty may be public trust itself.
