By: Staff Writer
June 19, Colombo (LNW): The Sri Lankan government is intensifying efforts to revive and support Small and Medium Enterprises (SMEs) with a sweeping financial package exceeding Rs. 1 trillion and a raft of institutional reforms aimed at boosting long-term sustainability, the Ministry of Finance announced.
In 2024 alone, over Rs. 1 trillion has been distributed to SMEs through 16 public and private banks, resulting in the issuance of 163,279 loans. Finance Ministry data show that approximately 51% of this funding has been directed towards industrial enterprises, with 13% allocated to agriculture and service sectors.
Recognising the critical role SMEs play in the economy—contributing 52% to GDP and employing over 4.5 million people—the government has rolled out multiple financial and technical initiatives. Among them is the establishment of a Rs. 5 billion fund to support SMEs facing short-term investment and working capital challenges.
The Central Bank has advised licensed commercial and specialised banks to offer extended concessions, including interest relief and new lending lines, to SMEs affected by recent economic crises. Notably, the deadline for banks to finalize rescheduling agreements under Circular No. 04 of 2024 has been extended from June 15 to June 30, 2025, giving businesses additional time to stabilize.
To further strengthen SME resilience, the government is creating a new Development Bank aimed at providing accessible, possibly collateral-free financing, especially for startups and underserved entrepreneurs. At the same time, the Ministry of Industry is enhancing access to low-cost credit through the Industrial Development Board (IDB).
On the technical front, a series of Business Development Services (BDS) will be introduced, including district-level Technical Service Centres to guide SMEs in technology, innovation, and management. A Technology Development Fund is being set up to encourage research and development, complemented by new Voucher Schemes that will subsidize SME access to BDS and R&D.
The Ministry of Industry and Entrepreneurship Development has already formed an Advisory Committee to support businesses still reeling from the COVID-19 pandemic and the economic crisis. Plans are also underway to establish a dedicated SME Authority to consolidate oversight and fast-track development processes.
Sri Lanka had over 1.3 million Micro, Small, and Medium Enterprises (MSMEs) in 2022. However, nearly 16% had closed permanently, and around 4.5% were temporarily shut due to economic hardship. The government’s renewed focus includes tapping into emerging sectors like green technology, ICT, and Agri-tech to ensure SMEs not only recover but thrive in a more resilient economic ecosystem
Govt Launches Revival Drive for Crisis-Hit SMEs providing Rs. 1 Trillion Aid
Sri Lanka Seeks Bangladeshi Investment to Boost Pharma Sector.
By: Staff Writer
June 19, Colombo (LNW): Sri Lanka has extended a strong invitation to Bangladeshi entrepreneurs to invest in its pharmaceutical sector and collaborate in key export-oriented industries, signaling a renewed push to deepen economic ties between the two South Asian nations.
The appeal was made during a high-profile business plenary session titled “Sri Lanka & Bangladesh Economic Ties: Building Bridges for Growth”, held on June 18 at the National Chamber of Commerce of Sri Lanka in Colombo. The event brought together over 70 Sri Lankan companies and a business delegation from the Dhaka Chamber of Commerce and Industry (DCCI), resulting in more than 150 bilateral business meetings.
With Sri Lanka actively seeking to reduce its reliance on imported medicines and boost domestic manufacturing capacity, officials said the time was ripe for Bangladesh — which has developed a competitive and growing pharmaceutical industry — to play a more prominent role in meeting Sri Lanka’s needs.
President of the National Chamber, Anura Warnakulasooriya, emphasized the importance of fostering mutual trust and greater private sector engagement, saying that both countries stood to benefit from partnerships in value-added sectors.
Andre Fernando, President of the Sri Lanka-Bangladesh Business Cooperation Council, specifically urged Bangladeshi investors to explore opportunities in Sri Lanka’s pharmaceutical industry, where the government is encouraging foreign direct investment and offering facilitation through dedicated export processing zones.
Reinforcing this message, Renuka M Weerakone, Director General of the Board of Investment (BOI), highlighted that Sri Lanka has established 15 export processing zones — several of which are geared toward pharmaceuticals, medical devices, and fabric-based industries — offering investment incentives and infrastructure support.
DCCI President Taskeen Ahmed said Bangladesh’s pharmaceutical, garments, leather, and ICT sectors were globally competitive, and he welcomed Sri Lankan businesses to invest in Bangladesh’s own economic zones, which offer tax breaks, modern logistics, and skilled labor.
Bangladesh is already a key supplier of pharmaceuticals and ready-made garments to Sri Lanka, but both sides agreed the potential remains largely untapped. Export Development Board Chairman Mangala Wijesinghe called for expanded cooperation in packaging, logistics, and agriculture, in addition to pharmaceuticals.
Both the Bangladeshi High Commissioner to Sri Lanka Andaleeb Elias and Sri Lankan High Commissioner to Bangladesh Dharmapala Weerakkody endorsed a Free Trade Agreement (FTA) to dismantle tariff barriers and facilitate smoother trade flows.
Former DCCI President Rizwan Rahman stressed the importance of maritime connectivity and regulatory reforms to unlock further trade potential, noting that improved shipping and lower trade costs would benefit both economies.
Govt on Standby to Rescue Sri Lankans in Israel
By: Puli
June 19, Colombo (LNW): The Sri Lankan government is fully prepared to evacuate its citizens from Israel if the situation worsens due to the ongoing conflict, Foreign Minister Vijitha Herath told Parliament today.
Responding to a question raised by SJB MP Rohana Bandara, the Minister said arrangements are in place to bring Sri Lankan expatriate workers home should an emergency arise.
“We will bring them to bordering countries by land and will send flights to bring them back home,” he said.
The government continues to monitor the situation closely and is ready to act swiftly if evacuation becomes necessary.
Duminda Dissanayake in Court Over Gold-Plated firearm Case
By: Puli
June 19, Colombo (LNW): Former Agriculture Minister and SLFP Anuradhapura organiser Duminda Dissanayake, who is currently in remand custody, was presented before the Mount Lavinia Magistrate’s Court today (19).
He was arrested following the discovery of a gold-plated firearm at the Havelock City housing complex. Dissanayake remains in custody as investigations into the incident continue.
At a previous hearing on June 5, the court extended his remand until June 19, pending further inquiries into the origin and ownership of the weapon.
Showers and Thundershowers Expected in Several Areas with Strong Winds in Parts of Sri Lanka – Public Urged to Take Precautions
June 19, Colombo (LNW): Several spells of showers will occur in the Western, Sabaragamuwa and North-western provinces and in Nuwara-Eliya, Kandy, Galle and Matara districts.
Showers or thundershowers may occur at a few places in the Uva province and in Ampara and Batticaloa districts in during the afternoon or night.
Fairly strong winds of about (30-40) kmph can be expected at times over Western slopes of the central hills and in Northern, North-central, Southern and North-western provinces and in Trincomalee district.
The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.
(Department of Meteorology)
Treasury Reform Puts Emission Trust Fund at Risk
Sri Lanka’s Vehicular Emission Test Trust Fund (VETTF), a key initiative in curbing vehicle-related pollution, faces an uncertain future following sweeping fiscal reforms introduced under the Public Financial Management Act No. 44 of 2024.
The new legislation mandates the dissolution of all independently managed public funds and their integration into the central Treasury. As a result, the VETTF—established in 2008 to support vehicle emission regulation—is now required to transfer its financial assets to the Treasury by August 25, raising concerns over the continuity and autonomy of critical environmental efforts.
According to a senior Treasury official, the change is not aimed at abolishing the fund but is a “statutory requirement” to ensure greater transparency and centralized fiscal oversight. “Departments can no longer manage independent funds. Everything must now go through the Treasury,” he explained.
The Motor Traffic Department (MTD), which oversees the fund, confirmed the directive was communicated through an official circular. A senior MTD source, speaking on condition of anonymity, acknowledged the fund was deemed non-statutory under the new regulations, necessitating its dissolution.
The VETTF is financed through a 10 percent levy on vehicle emission tests, with the remaining 90 percent allocated to private testing companies. Though official figures are not disclosed, revenue from the program is estimated at Rs. 1.5–2 billion annually, based on test volumes and vehicle registrations.
Since its inception, the fund has supported a wide range of initiatives including random on-road emission checks, public education campaigns, training of emission testing technicians, and research into improving air quality. One of its notable projects in 2023 was the “WhatsApp Spotter” program, which empowered citizens to report vehicles emitting excessive smoke in real time.
Environmentalists and transport sector professionals are voicing concern that centralizing the fund’s management could reduce the efficiency and independence of these operations. They argue that the fund’s unique structure—governed by a five-member board and protected under a trust deed—has enabled targeted, responsive decision-making without reliance on Treasury funding.
The origins of the VETTF lie in public advocacy dating back to 1998 and a landmark Supreme Court ruling in 2000, which led to its creation as a mechanism to independently support vehicle emission regulation.
While the Treasury has assured continuity of operations under centralized management, critics warn that losing the fund’s autonomy could dilute its impact, undermine transparency, and stall progress in reducing vehicular emissions in Sri Lanka.
Pelwatte at the Forefront as Sri Lanka Plans Dairy Self-Sufficiency
The Government is embarking on a strategic plan on revitalising the dairy industry with initiatives aimed at enhancing productivity, improving milk value chains, and supporting local farmers while encouraging private sector investments.
Key efforts include a new project utilising World Bank funding to boost dairy farm productivity in specific districts, and to transform state-owned dairy companies into efficient and market-driven enterprises.
A project funded by the World Bank is underway to enhance dairy farm productivity in key districts like Anuradhapura, Matale, and Galle ensuring a more efficient and sustainable dairy industry.
This strategic plan is aimed at transforming MILCO and the National Livestock Development Board into efficient and productive enterprises, according to President’s Office Sri Lanka.
A Milk Development Fund will be set up to support dairy farmers by improving their livelihoods and farming standards
Sri Lankan private sector has also stepped in to develop the dairy industry, aiming to boost milk production and meet local demand with the encouragement of the government through initiatives like providing state land to private companies for commercial dairy farms and supporting local dairy farmers with training and insurance.
In a far reaching move to improve the dairy industry, Pelwatte Dairy Industries Ltd, Sri Lanka’s largest milk collector and a key player in the dairy sector is expanding its production capacity with a Rs.3.1 billion investment in a state-of-the-art Greenfield dairy processing facility in Ibbagamuwa, Kurunegala.
Founder Chairman of Pelwatte Dairy Industries, Master Divers, and President of Mawbima Lanka Foundation Ariyaseela Wickramanayake, said that the new factory is being developed as an environmentally sustainable project featuring modern
At initial capacity, the new plant will process 50,000 to 80,000 litres of milk daily, sourced directly from farmers across the Northwestern Province and the full capacity will be set at 300,000 litres. The factory is scheduled for completion by June 2026.
The company currently exports ice cream and butter to the Maldives and is preparing to expand into other international markets, including Seychelles and Mauritius. It also exports milk powder mainly to China and a few African countries
He expressed the belief that Sri Lanka could achieve self-sufficient dairy and sugar production as well as major agricultural crops with the encouragement of the government.
Mr. Wickramanyake disclosed that he was instrumental in initiating the concept of Hambantota port which is now becoming a regional hub for the East-West maritime traffic
He noted that he realised the importance of a seaport in Hambantota in the seventies, and did several studies on it. In 1997, he wrote a book on why it has to be Hambantota a strategic location, he added. .
Agriculture was the success of Sri Lanka‘s past and it is the future too” he said pointing out that that farming practices have sustained communities in the past, also hold the key to a sustainable and prosperous future prospects
GDP Growth slows in Q1, Industrial Sector keeps Sri Lanka Economy Afloat
Sri Lanka’s economy grew by 4.8% in the first quarter of 2025, reflecting a slowdown in momentum compared to recent quarters, according to the Department of Census and Statistics (DCS). This marks the second-lowest quarterly growth in the past year and is a drop from the 5.3% expansion seen in the same period last year.
Despite the dip, the economy continued its recovery trajectory, registering its seventh consecutive quarter of positive growth since the third quarter of 2023. Sri Lanka’s economy rebounded strongly in 2024, posting a full-year growth of 5.5%, a sharp turnaround from the 2.3% contraction in 2023.
In Q1 2025, agriculture contracted by 0.7%, dragging down overall performance, while industrial and services sectors grew by 9.7% and 2.8% respectively. Taxes minus subsidies on products rose by 8.3%.
Industrial activity played a leading role in the quarter’s growth, driven by the manufacturing, construction, mining, and quarrying sectors. Manufacturing alone grew by 9.6%, while the construction sector expanded by 10.7%, and mining and quarrying surged by 12.6%. This was supported by a stable exchange rate, lower interest rates, and increased imports of investment and intermediate goods.
However, agriculture weighed down the overall figures. Although sub-sectors like animal production (18.8%), marine fishing (14.5%), and tea cultivation (5.6%) saw notable gains, the sector declined due to sharp contractions in fresh water fishing (-57.0%), oleaginous fruit cultivation (-27.6%), and rubber production (-22.2%). Other key crop categories such as rice (-0.8%) and cereals (-0.4%) also posted declines.
Within industry, most sub-sectors showed growth. Notably, electricity, gas, steam, and air conditioning supply increased by 3.4%, while sewerage and waste management grew by 7.9%. However, water supply fell by 3.2%. In contrast, two manufacturing categories—repair and installation of machinery (-10.6%) and refined petroleum products—saw no or negative growth.
The services sector posted a 2.8% increase, slightly higher than the 2.5% reported a year ago. Key contributors included financial services and accommodation-related activities, reinforcing the gradual economic rebound.
While the slower growth in Q1 signals a tempering of the recent recovery pace, consistent quarterly expansion and strong performance in industrial sectors highlight the economy’s underlying resilience.
Sri Lanka Seals Bilateral Debt Deal with France Boosting Economic Recovery
In a major development within Sri Lanka’s external debt restructuring journey, the country officially signed a bilateral debt agreement with France on Monday (June 16) in Colombo, according to the Ministry of Finance.
Representing the Sri Lankan government, Treasury Secretary Mahinda Siriwardana inked the deal, while William Roos, Assistant Secretary of Multilateral Affairs from the French Treasury, signed on behalf of France.
The Finance Ministry highlighted this agreement as a vital indicator of Sri Lanka’s dedication to swiftly concluding its debt restructuring program to restore debt sustainability and rejuvenate the national economy.
France, along with Japan and India, played a prominent role in co-chairing Sri Lanka’s Official Creditor Committee (OCC), guiding the country through complex negotiations to restructure its foreign debt. The Ministry praised France’s leadership and constructive involvement, emphasizing that such collaborative efforts have enabled significant progress in stabilizing Sri Lanka’s finances.
This agreement also signals an intention to deepen longstanding diplomatic and economic ties between France and Sri Lanka.
The French Embassy noted that 2023 marked a high point in bilateral relations, as leaders of both countries engaged in frequent high-level discussions. French President Emmanuel Macron and Sri Lankan President Ranil Wickremesinghe met three times during the year—in Paris during the Summit for a New Global Financing Pact in June, in Colombo in July, and again in October on the sidelines of COP28 in Dubai.
Notably, 2023 also saw the first formal political dialogue between the two nations, held in Colombo in October. The second edition of these top-level talks is scheduled to take place in France later in 2024, further strengthening political cooperation.
France, Sri Lanka’s fourth-largest official bilateral creditor, has been instrumental in uniting the creditor community. A key milestone was reached in June 2023 when negotiations culminated in Paris with a joint agreement signed by the OCC co-chairs and China’s Exim Bank. This agreement was formalized at the French Ministry of Economy and Finance during the 11th Paris Forum.
The latest bilateral pact enables France to expand its development cooperation in Sri Lanka. According to the Finance Ministry, French agencies such as AFD (Agence Française de Développement), the Economic Department, and the Embassy’s Cooperation and Cultural Action Department have consistently supported Sri Lanka—even during periods of economic turmoil.
The agreement stands as a testament to international solidarity and France’s enduring commitment to Sri Lanka’s recovery, paving the way for enhanced collaboration across economic, political, and cultural sectors.
PM Emphasises Rural Tourism and Regional Collaboration at China–Sri Lanka–Maldives Tourism Forum
Colombo, June 17 — Prime Minister Dr. Harini Amarasuriya reaffirmed the Government’s commitment to developing community-based and rural tourism while speaking at the inaugural China–Sri Lanka–Maldives Tourism Forum, held in Colombo on Monday (16) under the theme “Connectivity and Collaborative Success along the Silk Road.”
Addressing delegates, the Prime Minister highlighted the Government’s vision of a tourism sector that not only drives economic growth, but also empowers rural communities, protects ecosystems, and preserves cultural heritage.
“Our focus is on building a tourism industry that supports women entrepreneurs, youth participation, and eco-tourism, while strengthening the capacity of local tourism service providers,” she said. “Tourism must reach beyond the cities and touch underrepresented regions, ensuring benefits flow to rural communities.”
The Prime Minister also underlined the value of regional cooperation, calling for collaboration in visa streamlining, health and safety standards, digital infrastructure, and joint marketing strategies. She noted that working with China and the Maldives presents valuable opportunities to elevate the tourism industry in all three countries.
In a broader context, she described tourism as a tool for peacebuilding and human connection, stating, “In a divided world, tourism opens pathways to unite across borders, cultures, and generations.”
The event was attended by Chinese and Maldivian diplomatic representatives, senior officials from the Chinese Ministry of Culture and Tourism, and other invited dignitaries.