Category: Daily Financial Times

Sri Lanka Tourism Development Authority (SLTDA) Chairman Buddhika Hewawasam urged the industry to pivot toward higher-value tourism, warning that the country’s current yield per tourist remains far below its potential despite rising arrivals and strong seasonal performance.

Speaking at the Tourist Hotels Association of Sri Lanka (THASL) Annual General Meeting on Monday, Hewawasam said that while the country is on track to surpass key tourism milestones, the average revenue per tourist is still significantly lower compared to competing destinations across Asia.

He noted that most travellers visiting Sri Lanka spend around $ 300 per day, whereas competing destinations such as Malaysia, Indonesia, and island destinations across Southeast Asia report much higher yields.

‘Our challenge is not arrivals, its value. Countries around us are earning far more per visitor. We cannot sustain growth if we continue to attract high volume but low value,’ he said.

He also highlighted that Sri Lanka still struggles with seasonality, experiencing five strong months and seven weaker months.

‘We need year-round appeal. Without that, we cannot meet revenue targets even if arrivals rise,’ he added.

Hewawasam also revealed that Sri Lanka was to lose significant visitor numbers, with airlines cancelling around 45 flights weekly, a trend expected to continue if bottlenecks remain unresolved.

However, he said quick interventions by the private sector and relevant authorities have prevented the loss of 32,000 to 50,000 tourists in recent months amidst strained infrastructure during peak months.

Noting that Sri Lanka already crossed 2 million tourists for 2025, Hewawasam cautioned that volumes alone will not fix structural issues.

He stressed that Sri Lanka needs a minimum of 180,000-200,000 arrivals per month consistently to sustain industry-wide profitability, but more importantly, the country must focus on attracting travellers with higher spending power.

Accommodation bottleneck and domestic aviation constraints

Hewawasam acknowledged a severe accommodation imbalance, noting that Colombo offers more than 11,000 rooms, but many key tourism regions lack capacity.

‘There is a chicken and egg situation; hotels are reluctant to invest because air connectivity is low and airlines do not increase frequencies because room capacity is limited,’ he said.

He said SLTDA has released 3,000 acres for tourism investment, receiving over 130 proposals, with approvals for several expected by year-end. ‘This is aimed at unlocking accommodation supply in key regions,’ he added.

The Chairman stressed that Sri Lanka must build more entertainment, nightlife, events and year-round activities to compete for long-stay and high-spend travellers.

‘Tourists want experiences; entertainment, concerts, curated events and nightlife. We cannot rely only on beaches and heritage. The modern traveller spends on experiences, not just rooms,’ he said.

The Chairman said the destination urgently needs a unified nation-branding strategy to secure sustained growth.

He asserted that Sri Lanka does not simply need more advertising, but a comprehensive, globally aligned brand-positioning campaign.

‘We do a lot of marketing, what we lack is brand positioning,’ he said, predicting that without a strong country brand, Sri Lanka will struggle to compete in a region where destinations such as Japan, Indonesia, and Malaysia are aggressively repositioning themselves.

‘A dedicated marketing and nation-branding unit is being established with support from the World Bank, with a Cabinet paper already submitted. Once approved, it is expected to bypass bureaucratic delays and implement long-awaited global campaigns,’ he stressed.

He said Tourism Development Levy (TDL) revenue remains essential to funding major branding and development initiatives.

Hewawasam said Sri Lanka is simultaneously battling over-tourism during peak periods, particularly in December.

‘Data shows Colombo alone has around 16,000 rooms, but large areas with high tourism potential still lack sufficient accommodation. In many districts, hotel density is less than one property per square kilometre, with some zones offering only 800 rooms in total,’ he pointed out.

He said this imbalance and overcrowding in established hubs and lack of development in emerging ones, stems largely from poor accessibility.

On the aviation front, Hewawasam noted that Sri Lanka needs more domestic routes, more frequencies, and lower seat costs to support regional dispersal of tourists.

He also called for stronger coordination between SLTDA, THASL, and provincial stakeholders to expand visitor experiences nationwide.

‘We cannot grow tourism in isolation. The associations, hotel sector, airlines, and regulators must work together. This is the only way to transform Sri Lanka into a high-value destination,’ Hewawasam said.

Another COP has ended, and Bélm in Brazil is recorded for posterity. However, as they always say at the end, it was another Conference of the Parties that concluded with a watered-down agreement. Considering this is the 30th such meeting happening across the world, the amount of hot air and gaseous emissions released to realise these endings begs scrutiny on the sincerity of purpose. When the results are not positive and quite disheartening, it is reasonable when some pose the question – Why are we spending $1 billion plus and flying 50,000 people around the world just to talk about stopping emissions? The COP in Brazil was all about the climate crisis, and everyone knew why they were converging to this place next to the Amazon river. Ending fossil fuels and the Amazon rain forest were very much under discussion, yet they did not make it to the final agreement specifics only semantics and some promises on ensuring finances.

One thing is sure: there is a need for another COP to agree on proposals made here. The show will go on. However, it must be stated that the emphasis for urgent action that is continuously raised by the UN Secretary General is not getting materialised. In the climate front, with the UN Secretary General decrying the current planetary situation with a significant number of serious adjectives, the new insights ask for urgent actions and urgent repurposing of whatever we do. However, the same urgency is not felt by the global leadership, where there is much more disunity than unity, craving for someone’s resources and unsustainable consumption.

Facts and fiction

Occasionally, it is interesting to wander around between facts and fiction, as new insights are possible when you place yourself outside the box. Equating Colombo to Venice is a discourse in that direction. An analogy to get the sense of urgency to sink in and get all Nero’s to come to their senses. Well, an important part of the emerging Colombo is the Port City, which was reclaimed from the sea to grow and shine. It is bewildering to the mind to think what we were unable to do with 65550 sq km all alone would be outdone by a mere 2.69 sq. km!? The spanner in the work here is the question: did the Indian Ocean only give a temporary lease, only to claim it back with much more interest?!

From Dondrahead (Dewundara Thuduwa) you can look south and sail south as well. The next landmass is Antarctica – the World’s largest desert and the only uninhabited continent. Something is happening there which should be noticed by us. There is also an option for countries like Sri Lanka, where we have the right to set up a research station, as we have the right as a country. The issue, however, is not about setting the research station but the disappearance of the continent.

From Dondrahead (Dewundara Thuduwa) you can look south and sail south as well. The next landmass is Antarctica – the World’s largest desert and the only uninhabited continent. Something is happening there which should be noticed by us. There is also an option for countries like Sri Lanka, where we have the right to set up a research station, as we have the right as a country. The issue, however, is not about setting the research station but the disappearance of the continent

Disappearing glaciers

Currently, the Thwaite glacier of Antarctica is breaking and melting. Thwaite glacier is the world’s largest glacier. A real cause for concern, but not something we can rush out and restore. This mass of ice, once melted, is expected to contribute to a global sea level rise, and that is where the problem lies. We already speak of rising sea levels, land inundation, saltwater intrusion etc. This additional burden is significant, and the research says that this is likely to happen within a decade. Current data indicates that there is a 4.4 mm annual sea level rise taking place. On top of this average, a global sea level rise of 65 cm is possible with the disappearance of the Thwaite glacier. If the West Antarctic Ice Sheet is to collapse and melt in its entirety, the global sea level will rise by 3.3 m. The latter scenario can extend to centuries.

Disappearing glaciers has been in the news with the threat that the event poses. Glaciers in the Himalayas melting away and reducing will mean the most precious input that sustains rivers, which feed India, will vanish. Snow caps melting away can pose water supply issues to a number of cities worldwide, and Santiago, California are examples. Al Gore was quite specific in pointing to this aspect of shrinking glaciers in his Oscar-winning documentary The Inconvenient Truth. With Thwaite melting away in the West Antarctic, about 15000 km away, we are also thrust into the front line of an emerging environmental emergency.

Bringing attention to glaciers and primarily due to this issue of Thwaite melting, the world decided to have a World Glacier Day this year on 21 March. With Piduruthalagala, Sri Pada etc, entertaining no glaciers, we must have decided to give this global day celebration a miss and miss the point of our own connectivity to a glacier elsewhere. Primarily, the rising global temperatures are being identified for the glacier decline. Deposition of carbon particles from unsound human practices such as burning of waste and thermal power plants, entering global circulation patterns and getting deposited on polar ice are also considered to accelerate solar absorption – being black particles! – and accelerate melting.

Issue of sea level rise There is also a school of thought on the rapid melting of Thwaite due to the presence of a geological ‘hot spot’, which is a massive 620,000 sq mile area. This is due to apparently more than hundred active volcanoes underneath. Whether it is climate change or volcanic heat flux, the ice mass in Antarctica is facing a double whammy, and melting is the net result. This melting at scale manifests as sea level rise. It is now an abnormal ice sheet melting with respect to the Thwaite glacier is an established fact. Melting of the Thwaite is expected to yield two feet of sea level rise. With the glacier gone, there are a few more glaciers and the West Antarctic ice sheet that will rapidly disappear. This is expected to add a further 8 feet of sea level rise. Ten feet overall. There are many, including NASA, who are carefully watching this part of Antarctica 12000 km away from Dondrahead and how the sea level is changing. Understanding scenarios supports decision making, and this scenario has been studied by Chandanie with her team, one of our GIS experts with CEA’s R and D division. Due to resource limitations, matching developments to the Sri Lankan coastline is not quite easy. Yet some of the preliminary findings are shown here to open the dialog that we lack yet are important. Venice in the Indian Ocean is my clickbait to engage. Two hot spots in Sri Lanka are evident even with the limited resolutions available.

We are currently experiencing the issue of sea level rise via sea water intrusion in rivers, and especially where we are having water intakes for drinking and industrial uses. Salinity barriers are being discussed while issues have surfaced with the Kelani, Kalu and Nilwala rivers. Salt-tolerant agriculture is another topic that the researchers are talking about, but decision makers are completely unaware of.

State of health of Antarctica is looking quite shaky. The disappearance of a good part of the continent is not just about redrawing the contours and maps. The consequence of that event dynamically happening today as we read this, will ask us to redraw our coastlines too. Today, Thwaite has been given a nickname – Doomsday Glacier. I must state that science is much more optimistic here, but sans scientific decision making, that state of affairs may be exactly where we are headed for.

A special hotline system has been introduced for reporting emergency situations in the Colombo District as heavy rain and potential risks are expected over the next 48 hours.

The Colombo Stock Exchange has granted in-principle approval for InsureMe Insurance Brokers Ltd to list its ordinary voting shares on the Empower Board through an introduction, with 2,055,290 ordinary voting shares admitted for trading.

The CSE said the shares will be listed on or before the third market day following receipt of the company’s formal declaration. Further information will be announced once the listing date is confirmed.

The company said the listing is intended to support two strategic objectives. First, it aims to strengthen corporate and brand visibility as InsureMe pursues growth plans in Sri Lanka, the Asia-Pacific region and the MENA markets through its insure-tech products.

The company noted that these expansion plans do not require approvals from the Insurance Regulatory Commission of Sri Lanka (IRCSL). Second, the listing is expected to reinforce governance by adopting Colombo Stock Exchange corporate governance structures and meeting ongoing listing obligations.

The company reported a revenue of Rs. 301.6 million for the year ended 31 March 2025 and a net profit of Rs. 24.4 million.

The company has recorded a compound annual revenue growth rate of 19% over the five financial years to FY 2024/25, despite periods of weaker demand during the economic downturn. Revenue is tied to the volume of policies purchased through the insureme.lk platform, and therefore moves in line with overall insurance demand and customer activity on the platform.

Gross profit margins peaked in FY 2022 and FY 2023 before normalising to around 40-45% in FY 2024 and FY 2025. The increase in direct salaries from FY 2024 contributed to a moderation in both gross profit and net profit margins. Net earnings remained positive throughout the five-year period.

The sharp rise in revenue reported in FY 2022/23 reflected both growth in the number of policies sold and higher commission income per policy following an increase in market-wide insurance premiums. Profitability improved accordingly in line with the stronger gross margin. Revenue volatility eased thereafter, though the higher staffing costs weighed on margins, keeping overall profitability at a modest but stable level.

InsureMe also owns Digital Services Global Ltd.

The group maintains an asset-light balance sheet consistent with its service-based operating model. As at 31 March 2025, total non-current assets amounted to Rs. 47.9 million, largely comprising intangible assets and property, plant and equipment. Current assets, made up primarily of trade receivables and cash and cash equivalents, stood at Rs. 257.8 million at the end of the financial year.

Equity increased to Rs. 143.3 million in FY 2025 from Rs. 116.5 million in the previous year. The group carries no long-term or short-term borrowings other than a minimal bank overdraft, reflecting an operation funded almost entirely through equity capital.

The Board of InsureMe Insurance Brokers comprises Chairman Prajeeth Balasubramaniam, who serves as a non-executive, non-independent director; CEO and executive director Srilal Vipula Dharmapala; managing director Winston Jayaprakash Manickam; and executive director Indika Udana Prematunga. The non-executive, non-independent director is Rishi Kant Srivastava. Independent oversight is provided by non-executive independent directors Sagara Ranga Medagama Gamage and Waruna Randeewa Malalasooriya.

Budget 2026 lays a foundation for SME growth, but its success will depend on implementation speed, transparency, and a shift from debt-driven support to capability-building and global integration. For SMEs, this Budget offers hope and opportunity-but turning policy into tangible outcomes requires collaborative effort between Government, financial institutions, and private sector stakeholders

Introduction

The 2026 National Budget, presented by President Anura Kumara Dissanayake, comes at a pivotal moment for Sri Lanka’s economy. Following two years of IMF-led reforms and a steady recovery trajectory, the Government has set ambitious goals: sustained GDP growth above 7%, fiscal consolidation, and integration into global value chains. But for the backbone of the economy-Small and Medium Enterprises (SMEs)-the question remains: Has the Budget 2026 provided sufficient support to drive resilience and growth?

Why SMEs matter

SMEs contribute over 52% of Sri Lanka’s GDP and play a critical role in employment generation. Their ability to thrive determines the pace of economic recovery and inclusive growth. However, SMEs have faced severe challenges since the 2022 crisis-tight credit conditions, high inflation, and limited market access. Budget 2026 needed to address these structural issues while fostering competitiveness.

President and Finance Minister Anura Kumara Dissanayake

Key SME-focused measures in Budget 2026

1. Lower investment threshold for tax incentives

The qualifying investment threshold for enhanced capital allowances has been reduced from $ 3 million

to $ 250,000, making tax incentives accessible to SMEs. Enhanced capital allowances of 100% (or 200% for Northern Province) can now be claimed for investments in fixed assets, in addition to standard capital allowances under the Inland Revenue Act.

2. Concessionary loan schemes

The Government has introduced loan facilities through local banks at concessional interest rates, offering:

Up to Rs. 25 million for successful businesses

Rs. 15 million for enterprises facing hardship

Up to Rs. 50 million for others

Additional schemes target youth entrepreneurship, women-led businesses, and microfinance initiatives, signaling a strong push for inclusive SME financing.

Budget 2026 allocates:

Rs. 7,700 million for the SME Development Loan Scheme

Rs. 6,200 million for Agricultural Value Chain Development

Rs. 15,000 million for the Pledge Loan Scheme for paddy mill owners

Rs. 800 million for the Sustainable Farmers’ Loan Fund

Rs. 1,700 million for the New Comprehensive Rural Credit Scheme (NCRCS), offering agricultural loans up to Rs. 3 million at 5% interest

These measures aim to ease liquidity constraints and foster inclusive growth, particularly in rural and agricultural sectors.

3. Institutional reforms for SME development

Budget 2026 proposes consolidating SME support agencies-IDB, NEDA, and SMED-under the Industrial Development Board to streamline services, reduce duplication, and improve efficiency in delivering technology, market access, and advisory support.

4. Digitalisation and market access

The Government plans to establish Startup Ecosystems, IT zones, and data centers, alongside a Digital Single Window for investment approvals. Export-oriented SMEs will benefit from the National Export Development Plan (2025-2029) and the introduction of a Trade National Single Window (TNSW) to simplify export documentation and reduce administrative bottlenecks.

Budget 2026 also emphasizes developing auxiliary zones linked to existing investment zones, creating opportunities for SMEs to integrate into industrial value chains, access shared infrastructure, and reduce operational costs.

Challenges and missed opportunities

Despite positive steps, concerns remain:

nIndirect Tax Burden: Lower VAT and SSCL thresholds (Rs. 36 million) will bring more SMEs into the tax net, increasing compliance costs.

nAccess to Credit: Effective implementation and timely disbursement of loans will be critical.

nExport Competitiveness: Tariff reforms and para-tariff phase-outs lack clear timelines, creating uncertainty for SMEs engaged in trade.

Lower inflation and interest rates should ease operating costs and improve credit access. However, broadening the VAT base without reducing the VAT rate adds pressure on SMEs and consumers. Given VAT’s regressive nature, a rate reduction would have provided meaningful relief.

Budget 2026 demonstrates intent to empower SMEs through lower investment thresholds, concessional financing, institutional reforms, and digitisation initiatives. However, success hinges on swift execution, ease of access, and complementary support in skills development and infrastructure

Global best practices for SME support

While concessional loans and tax incentives are important, global best practices show that SME development requires more than financial assistance. Countries such as Singapore and South Korea have

successfully empowered SMEs by providing:

nAccess to technical and managerial skills

nMentorship programs and international market exposure

nSupport for obtaining globally recognized certifications

In Singapore, programs like the Enterprise Development Grant (EDG) and Market Readiness Assistance (MRA) help businesses upgrade capabilities and expand internationally. SkillsFuture equips SME owners and employees with technical and business management skills, while certification support enables compliance with foreign market standards.

South Korea’s Ministry of SMEs and Startups (MSS) offers structured programs for technology development, global partnerships, and legal compliance. Initiatives such as the Global Corporate Collaboration Program and Startup Legal Support Program assist SMEs in forming international alliances and navigating regulatory requirements. These measures help SMEs build sustainable business models, enhance competitiveness, and reduce dependency on debt.

The way forward

Budget 2026 demonstrates intent to empower SMEs through lower investment thresholds, concessional financing, institutional reforms, and digitisation initiatives. However, success hinges on swift execution, ease of access, and complementary support in skills development and infrastructure.

The Government should actively facilitate:

nInternational market access: Promote Sri Lankan SMEs globally and assist with trade fair participation.

n Skill development: Offer training in technical, managerial, and digital skills.

nCertification assistance: Provide guidance and subsidies for international certifications.

nInnovation and technology adoption: Encourage digital transformation and sustainable practices.

Such measures will strengthen SMEs and position Sri Lanka as a dynamic player in the global economy.

Conclusion

Budget 2026 lays a foundation for SME growth, but its success will depend on implementation speed, transparency, and a shift from debt-driven support to capability-building and global integration. For SMEs, this Budget offers hope and opportunity-but turning policy into tangible outcomes requires collaborative effort between Government, financial institutions, and private sector stakeholders.

Whilst the dust settles down on the Budget 2026 with many points of view expressed, the key point missed out was how Sri Lanka can become a 6% plus economy in the next three years or have a forex earning of $50 billion annually. Let me explain.

Budget must be laser sharp

I remember one of my bosses in the UN once stating that strong annual plans tend to have a few strategic initiatives to make a significant impact to the top line. What he meant was that, if the objectives to be met are clear, then we must have a few laser sharp initiatives that can achieve the set objectives.

He went on to explain how good leaders are so clear on the objectives that have to be achieved, a combination of entrepreneurial and data driven plans mixed with gold standard execution that will really make a difference. Budget 2026 sadly, did not bring out these characteristics. Let’s not forget that the current Government has a two thirds majority. Which means that a laser sharp Budget was a possibility.

Sri Lanka in the red

If we were to analyse Budget 2026, there is something for everybody. I guess when a political party has a two thirds majority and was able to garner 6.8 million votes to a single political party, there is no option but to have a multitude of initiatives to cater to the different segments of the community. Whilst this strategy has its merits, the point missed in Budget 2026 is that this strategy will not get Sri Lanka out of the red.

The fact of the matter is that even though the foreign reserves stand at $6.2 billion dollars, once the currency swaps are taken off the net reserves as per IMF stipulations Sri Lanka is at a minus on foreign reserves. If we use the Central Bank stipulations it is at a low ebb of around $ 3.4 billion. This is the naked truth. Let’s accept it.

Accept the reality

Whilst some can perceive the net foreign reserves (NFR) to be negative news, in my view it’s the best piece of data that I picked up from Budget 2026. The logic for this view is that it forces us, as a nation, to agree on what are the key 1-3 cutting edge initiatives that we have to do to make the financial health to be positive. What are the key reforms that must be brought in from cutting edge strategies in Exports, Tourism, Remittances and FDIs? Sadly, Sri Lanka did not see any clear cut strategies to build on the macroeconomic stability that the country received from the drastic reforms that the Wickramasinghe Government made.

A point that needs to be highlighted is that unless we accept this reality, we will continue to listen to the rhetoric that Sri Lanka’s performance is brilliant as a country ‘for the

amazing recovery it has made from a financial crisis’. This notion can be further justified by the World Bank report that emerged around a month back, that stated that Sri Lanka is one of the best turnaround countries from a severe financial crisis. To be precise, from 123 countries the best performing nation was highlighted as Sri Lanka since the 1980’s.

Whilst this accolade was a fact, this was due to the severe macroeconomic reforms that took place in 2023-2024. We can call this macroeconomic stabilisation reforms. For instance the revenue from the increased taxes is estimated to be at 15% of GDP. All imports were curtailed so that the Foreign reserves can be buffed up to $6.5 billion by end 2025.

A point to note is that this turnaround will be a waste unless the growth reforms are done to make Sri Lanka be at $9 billion in reserves by end 2026 and $11 billion in 2027 and $ 13 billion by 2028. If we do not achieve these objectives Sri Lanka will be challenged to meet the debt payments post 2027. Sadly, the national Budget announced by the President did not have any of these numbers as objectives. We also did not see laser sharp strategies to drive up foreign exchange.

Gold backed loans have also increased to Rs. 365.5 billion in the first half of 2025 which explains the distress levels among middle and lower middle income households as well as the debt crisis that is hitting the financial structure of the country. Gold is not just an asset but the security of a typical Sri Lankan household

Devil in the details

Whilst Sri Lanka has registered a 15.9% revenue on GDP beating the IMF target of 15.3%. We must commend the current Government for continuing the correct policies that were infused to the economy post the financial crisis.

However if we dig deeper, the staggering truth is that on the budgeted expenditure that was planned for 2025, we have not even spent 40-45% of the capital expenditure. This means that the public sector administration has not brought to life the plans presented in the 2025 Budget a reality. This was highlighted very strongly by the critics of the Budget namely the Opposition.

If we take away the political colour and focus on the data, what it means is that there is a leadership challenge to fix bottlenecks which are hampering the growth agenda of the country. To be specific the capital expenditure Budget was at Rs. 1.4 trillion but the actual utilisation will be around Rs. 600 billion. This is a very serious issue and it must be addressed. Some say the corruption investigations have slowed the implementation of the last Budget. This may be true but it also means that good governance is not bringing in the results that should have kicked into the economy.

The situation is compounded as data shows that there is over Rs. 1 trillion in the Treasury from the increased taxes and vehicle export duties earned. There are also billions of rupees in the promotional accounts Sri Lanka Tourism, Sri Lanka Tea Board. End of the day money in the bank does not help drive value addition. We must identify the pillars that can add value to brand Sri Lanka and make it happen so that we attract the top dollar tourists and export revenues that can get us closer to the financial objectives that IMF has stipulated in the years 2026 and 2027.

Silver lining

Going back to the words of my UN boss, good strategic plans have a few cutting edge initiatives once again makes so much sense. In fact the silver lining of a ‘bad situation’ is that it forces people to do the 1-3 key things that can make a serious impact on correcting the ‘bad situation’. Going back to the data shared before: if we take away the currency swaps the net foreign reserves as per IMF a stipulation Sri Lanka foreign reserve is minus. This forces us to ask ourselves what are the key initiatives that Sri Lanka can do in 2026 that can make a significant impact to the top line – foreign exchange reserves. This unfortunately did not come out of the Budget 2026 plans. Sadly I did not see the chambers of commerce address this particular issue with actionable next steps.

22.9% of the people being in poverty raised many eyebrows among policy makers. Apparently 10 % of households are on the vulnerable poverty belt and a small shock can move them to poverty. Meaning almost thirty 5% are in serious financial difficulty. This can only be corrected by increasing economic activity. We have to drive GDP growth

NPP-biggest win

Let me try to focus on the 1-3 initiatives that Budget 2026 missed out on so that even at this late stage we can support the Government. The logic for the word support the Government is because of the strong governance strategy that is being pursued with laser sharp clarity and strong leadership must be commended.

In the last six months performance on governance and corruption thrust that is in lay. Let’s accept it Sri Lanka was fast becoming the ‘Heroin capital of Asia’. The current Government must be commended for identifying this menace and has got support of governments around the world on this quest. Confiscated amounts include 1736 Kg of Heroin, 3784 Kg of Ice, 15,843 Kg of Ganja and 21,985 people taken into custody, in the year 2025 todate. This is an achievement that surely needs strong accolades.

The anti-narcotics strategies executed in the last ten months reveal that there is an ecosystem that has been at play for years on heroin smuggling and trafficking. Breaking this structure itself is the biggest contribution that the current Government has made for Sri Lanka. May be the Budget 2026 should have had a dedicated chapter on this area and allocation of resources to break this heroin ecosystem in Sri Lanka totally by the end 2026. It’s a case study for the world.

If we take away the political colour and focus on the data, what it means is that there is a leadership challenge to fix bottlenecks which are hampering the growth agenda of the country. To be specific the capital expenditure Budget was at Rs. 1.4 trillion but the actual utilisation will be around Rs. 600 billion. This is a very serious issue and it must be addressed. Some say the corruption investigations have slowed the implementation of the last Budget. This may be true but it also means that good governance is not bringing in the results that should have kicked into the economy

Consumer reality

If we once again look at the ground reality. The number of Sri Lankans whose income covering the expenditure on a monthly basis is only 37%. This is a very serious issue. Which means that many families are either borrowing money or pawning their assets to keep the household fires burning.

Official data from the Ministry of Finance reveal that unredeemed jewellery jumped from Rs. 210 billion in 2019 to Rs. 571 billion in 2024. Gold backed loans have also increased to Rs. 365.5 billion in the first half of 2025 which explains the distress levels among middle and lower middle income households as well as the debt crisis that is hitting the financial structure of the country. Gold is not just an asset but the security of a typical Sri Lankan household. When this asset is mortgaged or sold to buy school books and pay for tuition fees it means that things are very fragile at the consumer end. The World Bank stating that 22.9% of the people being in poverty raised many eyebrows among policy makers. Apparently 10 % of households are on the vulnerable poverty belt and a small shock can move them to poverty. Meaning almost thirty 5% are in serious financial difficulty. This can only be corrected by increasing economic activity. We have to drive GDP growth. 1-3 key initiatives

If we focus on the key initiatives. The first task is to increase the export revenue from the current $19 billion to $30 billion. This will need a step change. We do not have to go too far in this as our immediate neighbour – the Tamil Nadu Government is growing the GDP at over 11.6% in 2025. We have no option but to sign the Comprehensive Economic Partnership Agreement with India. When an economy today is $4.1 trillion and by 2030 is targeting $7 trillion we must push this agenda strongly.

One of the clear beneficiaries will be the apparel sector that will get free trade access for 30 million pieces of garments from the current 7 million. This requires some detailed analysis but conceptually this is the one initiative that can propel Sri Lanka’s economy.

The 2nd which some say the low hanging fruit is ‘Tourism’. On this the key strategic action will be to position Sri Lanka tourism with the global communication campaign. We have moved up the bar to attract a better quality tourist that can fetch a $200 traveller.

As of now the tourism sector is registering a 4.9% growth in 2025 at $2.6 billion. But a point to note is that this performance is a -33% as against the 2018 numbers of $3.5 billion. Hence we see the quantity and quality debate surfacing that only can be addressed if we add value to Tourism Sri Lanka with a strong communication campaign.

As at now the $5 billion target is almost a near dream than a target that one can aspire to achieve.

Leave alone the strategic objective of the projected $10 billion business that the industry was targeting in 2030, now this number has been revised down to $8billion without a clear action plan.

The third initiative that requires depth is the remittances to reach $10 billion with quality service exports of Sri Lanka talent. This will require a focussed drive that is white collar driven than the red quality reality.

Strong annual plans tend to have a few strategic initiatives to make a significant impact to the top line. If the objectives to be met are clear, then we must have a few laser sharp initiatives that can achieve the set objectives. Good leaders are so clear on the objectives that have to be achieved, a combination of entrepreneurial and data driven plans mixed with gold standard execution that will really make a difference. Budget 2026 sadly, did not bring out these characteristics. Let’s not forget that the current Government has a two thirds majority. Which means that a laser sharp Budget was a possibility

The way forward

To my mind these are the three strategies that can push the agenda for the Sri Lankan economy to be a 7% plus GDP growth. This also means that we can reach the $ 50 billion forex exchange target. But this will require razor sharp ‘ operational excellence ‘ backed by gold standard passionate implementation. I guess the next two years will tell the story.

The Colombo Stock Exchange has granted in-principle approval for InsureMe Insurance Brokers Ltd to list its ordinary voting shares on the Empower Board through an introduction, with 2,055,290 ordinary voting shares admitted for trading.

The CSE said the shares will be listed on or before the third market day following receipt of the company’s formal declaration. Further information will be announced once the listing date is confirmed.

The company said the listing is intended to support two strategic objectives. First, it aims to strengthen corporate and brand visibility as InsureMe pursues growth plans in Sri Lanka, the Asia-Pacific region and the MENA markets through its insure-tech products.

The company noted that these expansion plans do not require approvals from the Insurance Regulatory Commission of Sri Lanka (IRCSL). Second, the listing is expected to reinforce governance by adopting Colombo Stock Exchange corporate governance structures and meeting ongoing listing obligations.

The company reported a revenue of Rs. 301.6 million for the year ended 31 March 2025 and a net profit of Rs. 24.4 million.

The company has recorded a compound annual revenue growth rate of 19% over the five financial years to FY 2024/25, despite periods of weaker demand during the economic downturn. Revenue is tied to the volume of policies purchased through the insureme.lk platform, and therefore moves in line with overall insurance demand and customer activity on the platform.

Gross profit margins peaked in FY 2022 and FY 2023 before normalising to around 40-45% in FY 2024 and FY 2025. The increase in direct salaries from FY 2024 contributed to a moderation in both gross profit and net profit margins. Net earnings remained positive throughout the five-year period.

The sharp rise in revenue reported in FY 2022/23 reflected both growth in the number of policies sold and higher commission income per policy following an increase in market-wide insurance premiums. Profitability improved accordingly in line with the stronger gross margin. Revenue volatility eased thereafter, though the higher staffing costs weighed on margins, keeping overall profitability at a modest but stable level.

InsureMe also owns Digital Services Global Ltd.

The group maintains an asset-light balance sheet consistent with its service-based operating model. As at 31 March 2025, total non-current assets amounted to Rs. 47.9 million, largely comprising intangible assets and property, plant and equipment. Current assets, made up primarily of trade receivables and cash and cash equivalents, stood at Rs. 257.8 million at the end of the financial year.

Equity increased to Rs. 143.3 million in FY 2025 from Rs. 116.5 million in the previous year. The group carries no long-term or short-term borrowings other than a minimal bank overdraft, reflecting an operation funded almost entirely through equity capital.

The Board of InsureMe Insurance Brokers comprises Chairman Prajeeth Balasubramaniam, who serves as a non-executive, non-independent director; CEO and executive director Srilal Vipula Dharmapala; managing director Winston Jayaprakash Manickam; and executive director Indika Udana Prematunga. The non-executive, non-independent director is Rishi Kant Srivastava. Independent oversight is provided by non-executive independent directors Sagara Ranga Medagama Gamage and Waruna Randeewa Malalasooriya.

Citizens Development Business Finance PLC (CDB) sprinted to the finish line with a powerhouse performance at the 40th Mercantile Athletic Meet, reaffirming its place among the nation’s top corporate sporting contenders with a series of exceptional achievements.

Team CDB’s outstanding display featured new meet records, top individual titles and commanding overall rankings, showcasing both athletic prowess and CDB’s commitment to nurturing a winning culture.

This year, CDB athletes produced a wave of remarkable record-breaking moments. Bhakthi Wijesinghe set a new meet record in the Over-30 Women’s Triple Jump with a distance of 8.85m, while Gayan Thanthirige shattered the Over-30 200m record with an impressive 23.68 seconds.

In the Championship Category, A.P. Krishandan soared to a new Long Jump record with 7.18m, and Umaya Rathnayake delivered a blazing 57.87 seconds in the 400m hurdles to add another Championship record to CDB’s tally.

In the Novices Category, Thiviyan Puvika secured the 110m Hurdles record with a time of 17.30 seconds, rounding off an extraordinary set of performances.

Beyond the new records, CDB celebrated several standout individual victories. Bhakthi Wijesinghe won Best Athlete in the Over-30 Women’s category, while A.P. Krishandan emerged as a double-title winner, clinching both the Best Athlete – Championship Men and the prestigious Overall Best Athlete – Men titles. His dominance on the field established him as one of the star performers of the meet. This title of Overall Best Athlete – Men was won for the third consecutive year by Team CDB.

CDB’s collective efforts translated into strong overall results, finishing 5th among more than 51 competing companies with a remarkable 165 points. The team also captured both the Women’s and Men’s Overall Championships in the Champion Category, underscoring the depth, consistency, and competitive spirit across the squad.

The organisation’s success at the 40th Mercantile Athletic Meet reflects more than athletic achievement; it represents CDB’s commitment to developing well-rounded professionals, fostering sportsmanship and empowering its people to excel beyond their roles. By championing resilience, teamwork and performance excellence, CDB said it continues to cultivate a winning culture that thrives both on and off the field.

Fitch Ratings yesterday said the proposed transfers of State-owned shares of Housing Development Finance Corporation Bank of Sri Lanka (HDFC, BB+(lka)/Rating Watch Positive) to Bank of Ceylon (BOC, CCC+/AA-(lka)/Stable) and of State Mortgage and Investment Bank (SMIB, BB(lka)/Rating Watch Positive) to People’s Bank (Sri Lanka) (PB, AA-(lka)/Stable) are unlikely to affect the acquirers’ ratings.

‘The limited scale of the targets relative to the large state banks, and expectations around capital support, underpin our view,’ Fitch said in a statement.

The Government announced Cabinet approval on 11 November to transfer all direct and indirect State holdings in HDFC to BOC and SMIB to PB, respectively. The purchase consideration, structure and timeline have not been disclosed.

Fitch said it will assess final terms when they are available, including any consolidation method and timing.

‘We do not expect material changes to BOC’s and PB’s consolidated credit profiles from these transfers. HDFC and SMIB are small relative to their acquirers and the sector, accounting for 1%-1.5% of the acquirers’ bank-level assets,’ the ratings agency said.

HDFC and SMIB also have low risk densities due to their large exposure to Employees’ Provident Fund (EPF) backed loans, which are zero risk-weighted, limiting incremental risk-weighted assets.

The impact on the acquiring banks’ consolidated asset-quality metrics is also likely to be immaterial despite HDFC’s and SMIB’s significantly weaker asset-quality metrics than industry peers, as the acquirees are relatively small. EPF-backed loans carry a high impaired-loan ratio, but these are periodically settled by the Central Bank of Sri Lanka, reducing loss severity.

If a purchase consideration is involved, Fitch’s base-case expectation is that the Government will inject capital at least equal to the transaction price into the acquirers, such that capital ratios at BOC and PB are unaffected.

This would be consistent with the State’s record of being willing to support the banking sector when policy actions create capital needs. Absent such offsetting injections, any cash consideration could reduce the acquirers’ already modest buffers.

Capital buffers at BOC and PB are already under pressure from large exposures to the sovereign across loans and non-loan assets, Fitch noted.

These exposures attract capital deductions of 4% and 2% of BOC’s and PB’s risk-weighted assets, respectively, that the banks cannot include in regulatory capital, constraining loan growth relative to large private banks and weakening capital metrics compared with similarly rated peers.

BOC was recently required by the regulator to maintain a further 1% buffer over its total capital ratios. BOC’s and PB’s bank-level common equity Tier 1 ratios were 12.0% and 11.6%, respectively, compared with similarly rated peers’ 13.4%-16.7%.

BOC’s and PB’s national ratings reflect their superior domestic franchises that support their funding profiles, counterbalanced by weaker financial profiles relative to the domestic systemically important private banks.

Fitch said it will monitor disclosures of the transaction structure, valuation and any capital measures. A deviation from the expected capital support, or a materially larger consolidation impact on risk-weighted assets than we anticipate, could influence its assessment.

The Rating Watch Positive placed on HDFC’s and SMIB’s national ratings reflects Fitch’s view that these banks would potentially benefit from a very high likelihood of support from their new owners.

Minister of Industry and Entrepreneurship Development Sunil Handunnetti met YAN Xijun, Vice Chairman of the Standing Committee of the Hainan Provincial People’s Council, in Colombo to discuss strengthening bilateral trade.