Category: Daily Financial Times

Determined to work to turn the tide one step, one acre at a time, The Wildlife and Nature Protection Society’s Preserving Land and Nature (PLANT) initiative announced a strategic land partnership with Hatton Plantations PLC (HPL) to restore riparian ecosystems along the source locations of two of Sri Lanka’s most critical river systems in the Central Highlands. Under a newly signed Memorandum of Understanding (MOU), PLANT and HPL will collaborate to reforest and rehabilitate riverbanks along 24 kilometres bordering the Kelani River at the Dickoya Estate and the Mahaweli River’s Hatton Oya tributary spanning the Abbotsleigh, Strathdon, Shannon, and Carolina estates. These efforts will help stabilise slopes, reduce sedimentation, enhance biodiversity, and strengthen climate resilience in lower landscapes including some areas that sustained acute damage in the recent cyclonic disaster. This long-term effort aims at enhancing Forest corridor networks in the endemic-rich southwestern Sri Lanka.

A timely response to climate-driven impacts in the Central Highlands

Cyclone Ditwah recently struck Sri Lanka, unleashing extreme rainfall, floods, and landslides across the island. The Highlands suffered heavy casualties, massive infrastructure damage, and prolonged access constraints, while flooding of the Kelani and other rivers compounded the crisis. This event highlighted the vulnerability of hill-country communities to landslides and slope failures.

The Mahaweli River, Sri Lanka’s longest, historically supplies over 40% of the nation’s electricity and its basin spans nearly one-fifth of the island. Hatton Oya, a headwater tributary, drains steep montane terrain where riparian vegetation is critical for bank stability, sediment control, and buffering baseflow during intense precipitation. Scientists warn that Kelani Basin flood frequencies and damages are rising due to intensified rainfall and land-use pressures. Non-structural mitigation: riparian buffers, floodplain zoning, and riverbank reforestation, is increasingly recognised as essential. Restoration along Kelani and Mahaweli is nationally significant: reforested margins reduce peak flows, curb reservoir siltation, safeguard hydropower reliability, and protect irrigation schemes vital for agriculture. These nature-based solutions complement emergency works, embedding long-term resilience into river corridors.

Building on a proven corridor model

This partnership strengthens PLANT’s corridor-restoration model, first implemented to create a 9 km forest corridor along Maskeliya Oya, restoring over 125 acres of riparian forest and reconnecting habitats from Peak Wilderness Sanctuary down-valley. Supported by multi-stakeholder funding and community stewardship, the model proved private-sector land partnerships can drive ecological restoration in plantation landscapes. By restoring native riparian forests along major river systems, it reduces disaster risks by stabilising riverbanks, limiting runoff, and improving floodplain function during extreme rainfall. Forested corridors act as natural buffers, curbing downstream flooding and supporting biodiversity, while ensuring long-term stewardship by plantations, donors, and local communities.

Hatton Plantations PLC (HPL) reinforces this vision through strong ESG commitments: conserving 250 hectares of biodiversity-rich land, implementing rainwater harvesting, and advancing reforestation and soil health programs. Social initiatives include health, sanitation, education, and childcare, while governance emphasises transparency and compliance. The MOU unites PLANT’s ecological expertise with HPL’s land access and sustainability investments to accelerate nature-positive outcomes along critical river margins.

A call to action in the wake of Cyclone Ditwah

The recent devastation exposed the vulnerability of Sri Lanka’s Central Highlands, emphasising the vital role riparian forests play in stabilising slopes and protecting rivers. Restoration and landscape management are now essential for water security, biodiversity, and the resilience of communities and industries. Hatton Plantations PLC (HPL), as a land custodian, is committed to supporting this initiative with full resources. WNPS PLANT, the habitat-restoration arm of Sri Lanka’s oldest conservation organisation, works with private landholders to create ecological corridors, reforest degraded areas, and protect biodiversity, including endangered species. With 34 sites under its care and active research and community engagement, PLANT exemplifies science-led restoration and long-term stewardship.

This partnership between WNPS PLANT and Hatton Plantations PLC is a powerful start, but the challenge is far greater than any single initiative. Sri Lanka needs government action and multiple initiatives, but also more plantation companies, corporate leaders, and individual investors to step forward and commit to restoring waterways and forest corridors. Every contribution, whether land, resources, or expertise, helps rebuild the natural infrastructure that protects our nation’s lifelines. Together, fragile landscapes can be changed back into resilient ecosystems, thereby ensuring that Sri Lanka’s rivers, which occupy a special place in our nation’s history, continue to sustain life and livelihoods for generations to come. Our rivers were never feared, only loved, and need to remain that way for eternity.

Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe will announce the bank’s policy agenda for 2026 next Thursday (8 January) amid concerns of external sector and inflationary pressures post-Ditwah.

The CBSL is hosting an event titled ‘Central Bank’s Policy Agenda for 2026 and Beyond’ intended to set out the institution’s policy priorities for the coming year and the medium term.

Central Bank Governor Dr. Nandalal Weerasinghe, speaking at the Sri Lanka Investment and Economic Summit shortly after Cyclone Ditwah on 2 December 2025 and reiterating his assessment nearly a month later on national television, maintains an optimistic outlook on Sri Lanka’s post-cyclone economic recovery.

He said the economy could record stronger-than-expected growth in 2026, supported by increased public spending on reconstruction, while noting that it remains too early to fully assess the cyclone’s overall economic impact.

The Governor has said that baseline growth projections had previously been placed in the 4-5% range. However, additional stimulus from recovery and reconstruction expenditure could lift economic activity further, provided implementation is efficient and delays are minimised.

Dr. Weerasinghe said economic performance in 2023 had exceeded earlier expectations, with growth approaching 5% by the third quarter. While the impact of Cyclone Ditwah in the fourth quarter is still being evaluated, he indicated that overall growth for the year is likely to remain close to that level.

Prior to the cyclone, growth projections for the next few years were in the range of 4 to 5%. With recovery and reconstruction spending now added, economic activity in 2026 could be higher, the CBSL chief noted.

He said the Government has allocated Rs. 1.4 trillion for public investment in 2026, with a further Rs. 500 billion expected to be added for cyclone recovery efforts. This additional spending, particularly in construction and related sectors, is expected to provide further momentum to growth.

At the same time, the Governor cautioned that stronger demand for goods, services, and labour could place upward pressure on prices. Inflation, which has been around 2%, is projected to rise to about 5% by the third quarter of 2026, though stronger demand could accelerate that timeline.

Dr. Weerasinghe also highlighted potential implications for the external sector, noting that higher domestic spending would increase demand for imports such as construction materials and fuel, with possible pressure on the trade balance.

To manage these pressures, he said Sri Lanka would need to strengthen foreign exchange inflows through exports, tourism, and, where necessary, additional external financing in the form of loans and grants.

While the outlook points to upside potential for growth, the Governor stressed that actual outcomes would depend on how quickly and effectively recovery spending is executed, warning that procurement and implementation delays could constrain the expected gains. It is still too early to factor in everything, he said.

NDB Bank partnered with Kandy City Centre (KCC) as the Official Banking Partner of Splash Shopping Fiesta 2025, the biggest shopping festival of the season, held from 24-28 December. The event brought together an exciting blend of retail, entertainment, and festive cheer, creating a vibrant shopping experience for customers in the Central Province during the year-end season.

As the Official Banking Partner, NDB Bank played a key role in enhancing the overall experience by offering exclusive banking privileges to shoppers. NDB cardholders who participated in the Fiesta were able to enjoy discounts of up to 20%, adding greater value and convenience to their festive shopping while reinforcing NDB’s commitment to delivering lifestyle-driven benefits to its customers.

NDB Assistant Vice President and Head of Card Centre Ashan Wikramanayake shared his insights on the importance of such partnerships, noting that Splash Shopping Fiesta 2025 provided an ideal platform for the Bank to connect meaningfully with customers in a dynamic, high-engagement environment. He also highlighted that initiatives of this nature allow NDB to go beyond traditional banking touch-points and engage with customers in moments that matter most to them.

Adding a special festive highlight to the event, NDB also extended its popular Santa Campaign to Splash Shopping Fiesta 2025. In line with this initiative, NDB Santa Promo winners from the Kandy region were invited to participate at the Fiesta, where Santa personally delivered their gifts, creating joyful and memorable moments for children and families amidst the celebrations.

Held at Kandy City Centre, a premier lifestyle and retail destination in the heart of Kandy, Splash Shopping Fiesta 2025 once again lived up to its reputation as a much-anticipated annual event. NDB Bank’s participation reflected its ongoing commitment to supporting community-centric events that promote economic activity, strengthen customer relationships, and celebrate the spirit of togetherness during the festive season.

Education Ministry Secretary Nalaka Kaluwewa this week lodged a complaint with the Criminal Investigation Department (CID) following the discovery of the link to an inappropriate website appearing in a module related to Grade 6 English language prepared by the National Institute of Education.

The text with the new module had already been printed when the error was discovered following which its distribution was immediately suspended. The Government on its part has gone to the CID to see if the web address which opens up an adult website was introduced to the module deliberately or was a mistake. The CID inquiry may reveal more details but till then the Government has to deal with the fallout of this embarrassing mistake.

Educational reforms have already drawn wide attention with the sex education related syllabus under fire by the Buddhist and Catholic clergy. Both members of the Buddhist and Catholic clergy have voiced their concerns over the proposed changes.

Following the discovery of the appropriate web link on the textbook, Prime Minister Harini Amarasuriya, who is also the Minister of Education and Higher Education has been under fire from many quarters while there have been some calling for her resignation alleging that the education reforms initiated by her are exposing children to unsuitable online material. Archbishop of Colombo, Malcolm Cardinal Ranjith has been one of the strongest critics of the Government’s education reforms, saying they undermine parental rights and threaten Sri Lanka’s cultural and religious foundation. He has repeatedly spoken out on the nature of some of the reforms which he said exposes young children to inappropriate material.

He has alleged that through education reforms, certain international agencies that fund such programs are aiming to erode the family structures. The Maha Nayakas of the Asgiriya and Malwatte Chapters wrote to the President a few months ago voicing opposition to such changes which they say are not suitable for the country.

Education reforms have been a sticking point for many politicians and many who have held the post of Minister for Education have tried to introduce reforms that they personally feel will be better suited for the country. Some of the new reforms such as the introduction of IT and Artificial Intelligence are much needed for the students of today to cope with a fast changing world. But the issue of early sex education and how to go about it is a lot more sensitive and worrying for many parents who have had little or no say over the matter.

Prime Minister Amarasuriya has been more of an activist than a politician and even after a few years in Parliament, she continues to grapple with her dual role. She champions issues such as women’s and gender issues, childcare, youth affairs etc. She has been an academic too and largely involved in the issues close to the heart but education reforms does not seem to be her forte.

Both Amarasuriya and her Deputy Madura Seneviratne have, through their various statements, made it clear that they are hell bent on implementing the reforms from next week, come hell or high water. But given the latest embarrassment and the storm it is kicking up, they should put the reforms on hold and hold more consultations, particularly with parents whose children are going to be exposed to inappropriate material, without trying to push through other agendas. Amarasuriya and her Deputy’s intentions may be good as they want to prepare the students for the fast changing world but as they say the road to hell is paved with good intentions. What the PM is trying to push through may soon become the biggest liability for the Government and force President Anura Kumara Dissanayake to replace his Minister of Education with someone who has a better grasp of the local sensitivities. One thing that many in the NPP should realise is that hiding behind the CID isn’t going to save them for long and in this case, both the Secretary of the Education Ministry and the Minister should take responsibility for this mess.

An eye-opening and timely insider’s account of how patronage shapes nations, set against Sri Lanka’s recent political upheavals, has been launched by Sri Lankan economist and award-winning author Thisuri Wanniarachchi.

‘The Department of Chosen Ones’ is a memoir-driven exploration of how power truly operates inside the Sri Lankan state. Published by Vijitha Yapa Publications, the book traces Thisuri Wanniarachchi’s journey from a childhood shaped by war and ambition to the center of Government, where she served in the Presidential Secretariat as Assistant Director of Sustainable Development and became the youngest member of Maithripala Sirisena’s executive staff.

From inside the state, the book reveals how patronage, loyalty, proximity, and silence, rather than merit or ideology, shape decisions and outcomes. It follows her resignation during the 2018 constitutional coup and her subsequent role leading Harsha de Silva’s team of analysts at the Ministry of Economic Reforms, where she confronted the same systemic forces from a different vantage point, while attempting to push reform from within. Along the way, the memoir features encounters with key political figures including Ranil Wickremesinghe, Mangala Samaraweera, Mahinda Rajapaksa, and senior bureaucrats such as Austin Fernando.

The narrative then moves into the world of international development, following her work across multiple countries and institutions and carrying the lessons learned inside Sri Lanka’s political system into new contexts. At the same time, the book remains deeply personal, reflecting on ambition, love, belonging, and the cost of dissent. It also incorporates the findings of Wanniarachchi’s PhD research on the impact of political patronage on Sri Lanka’s public sector, asking what it means to grow into one’s convictions in systems where survival so often depends on being chosen.

Thisuri won the State Literary Award for Best English Novel at just sixteen for her debut, Colombo Streets, and The Department of Chosen Ones marks her return to Sri Lanka’s literary scene with her first work of nonfiction.

Solar power: A rising global force

Across the world, solar power has emerged as one of the fastest-growing sources of clean energy. It is environmentally friendly, increasingly cost-competitive, and particularly well suited to tropical countries with abundant sunshine. Recognising this global transition, Sri Lanka has set ambitious national targets: generating 70 percent of electricity from renewable sources by 2030 and achieving carbon neutrality by 2050.

Sri Lanka is naturally well endowed for solar energy generation. The country receives abundant sunlight throughout the year, especially in the dry zone, where solar radiation ranges between 4.0 and 6.0 kWh/m²/day. This provides a strong foundation for meeting a significant share of daytime electricity demand through solar power.

Solar energy also complements Sri Lanka’s existing hydropower system. Daytime solar generation can reduce pressure on hydropower plants during peak daylight hours, allowing valuable reservoir storage to be conserved for nighttime generation and drought periods. Such integration improves grid reliability while strengthening national water security, an increasingly critical concern under climate change.

The land constraint: A major bottleneck

Despite its potential, large-scale solar development faces a major constraint, which is land availability. In Sri Lanka, land is intensively contested among agriculture, forest conservation, settlements, and industrial development. Allocating vast tracts of land for solar farms often creates social, environmental, and political tensions.

If Sri Lanka is to meet its renewable energy ambitions without compromising food security or ecosystems, innovative solutions that minimise land acquisition are essential.

Canal-top solar: Turning infrastructure into opportunity

One promising solution is the installation of solar panels over irrigation canals. This concept, already implemented successfully in several countries, converts existing infrastructure into dual-purpose systems, generating clean energy while simultaneously reducing water losses from evaporation.

Canal-top solar offers multiple advantages:

No land acquisition: Canals already exist under government ownership

Faster implementation: Installation is quicker than land-based solar projects

Higher efficiency: The cooling effect of flowing water can improve panel performance by 7-15 percent

Water conservation: Canal coverage can reduce evaporation losses by 50-80 percent

Farmer benefits: Reliable and affordable electricity supports irrigation pumping and farm mechanisation

A canal-top solar installation covering just one hectare (10,000 m²) can generate 0.8-1.2 MWp of power which is equivalent to 1.2-1.8 GWh annually, while saving around 12 million litres of water each year. This volume of water alone is sufficient to produce nearly 5,000 kilogrammes of rice per annum.

India’s experience: Proof of concept at scale

India has been a global pioneer in canal-top solar development. In 2012, the State of Gujarat commissioned the world’s first canal-top solar pilot project on the Narmada Canal. The 1 MW installation not only generated clean electricity but also saved approximately 9 million litres of water by reducing evaporation.

A canal top solar power system in the State of West Godavari, India

Encouraged by its success, the Gujarat Government expanded canal-top solar capacity to 35 MW across 13 kilometres of canals by 2017, installing more than 116,000 solar panels. The State now plans to extend this model across parts of its 19,000-kilometre canal network. The project has the potential to generate thousands of megawatts of electricity, save nearly 57,000 hectares of land, and conserve vast quantities of water.

Other Indian states-including Maharashtra, Punjab, and Andhra Pradesh-have followed suit. These projects demonstrate that canal-top solar is not merely a technical novelty but a scalable, socially acceptable, and economically viable solution.

Growing global interest

Beyond India, canal-top and water-based solar systems are gaining attention worldwide.

United States (California): Recent studies suggest that covering major canals could generate up to 13 GW of electricity while saving nearly 63 billion gallons of water annually, an important strategy in drought-prone regions.

China: As the world’s largest solar producer, China is testing canal-top and floating solar systems as part of its effort to reduce coal dependence and optimise land use.

Morocco: Facing severe water scarcity and high solar potential, Morocco is exploring canal-based solar solutions to support both renewable energy expansion and irrigation efficiency.

These international experiences underline the adaptability of canal-top solar across diverse climatic and institutional contexts.

Sri Lanka’s untapped potential

Sri Lanka’s irrigation infrastructure offers enormous potential for canal-top solar. The Mahaweli Irrigation System alone includes nearly 1,900 kilometres of main, branch, and distributary canals.

If even a fraction of this network were utilised, Sri Lanka could achieve:

Installed capacity: Approximately 2,500 MWp

Annual generation: Around 3,750 GWh

Water savings: Millions of litres annually critical for dry-zone agriculture

This dual benefit of electricity generation and water conservation could be transformative. Farmers would benefit from improved irrigation reliability and affordable power while the nation would reduce fossil fuel imports, strengthen food security, and enhance climate resilience.

Opportunities and challenges

Opportunities

Expansion of renewable energy without sacrificing agricultural land

Conservation of irrigation water and enhanced food production

Electrification of rural areas and support for mechanised farming

Reduced fossil fuel dependence and improved climate resilience

Lower canal maintenance costs due to reduced weed growth and bank erosion

Challenges

High upfront investment costs requiring public-private partnerships

Engineering designs must allow access for canal maintenance

Long-term durability under humid tropical conditions must be ensured

Canal-top and floating solar: Complementary solutions

Both canal-top and floating solar systems have an important role to play:

Floating solar is best suited for large reservoirs and tanks, offering high-capacity generation but requiring careful management of water-level fluctuations and ecological impacts.

Canal-top solar is ideal for long, narrow canals, avoids land acquisition, reduces evaporation, and brings power generation closer to rural demand centres.

Together, these approaches form a complementary strategy for maximising the renewable energy potential of Sri Lanka’s water infrastructure.

Conclusion

For Sri Lanka, canal-top solar is more than an energy project. It is a strategic investment in water security, food production, and climate resilience. By learning from India and adapting global best practices to local conditions, Sri Lanka can unlock a new frontier in renewable energy without competing for land.

If implemented with foresight and institutional coordination, canal-top solar could place Sri Lanka at the forefront of innovative, climate-smart energy solutions in South Asia, delivering power, protecting water, and supporting farmers all at once.

Final policy recommendation

Sri Lanka should adopt canal-top solar as a national energy-water strategy, not as isolated pilot projects. A single lead agency must be mandated to implement canal-top solar in close coordination with the Irrigation Department, Mahaweli Authority, Ceylon Electricity Board and the Sustainable Energy Authority. Initial pilot projects should be launched in selected Mahaweli and dry-zone canals, followed by rapid scaling through public-private partnerships. Project approval and financing should explicitly value both electricity generation and water savings. Most importantly, implementation must remain farmer-centred, delivering reliable, affordable power for irrigation while conserving scarce water resources. With clear leadership and integrated planning, canal-top solar can simultaneously strengthen energy security, food production, and climate resilience.

Of the five matches that began yesterday in the Tier B 3-day League, table toppers SSC have already taken a first innings lead by dismissing Sebastianites for 99 at the Bloomfield grounds yesterday.

Sebastianites who won the toss and chose to bat first were all at sea against the seam movement of Kasun Rajitha (2/21) and Promod Madushan (4/30) with wicket-keeper Navindu Nirmal offering the only form of resistance scoring 37 off 101 balls. SSC in their reply lost three early wickets for 41 but recovered to end the day at 163-5 courtesy half-centuries from the skipper Avishka Fernando (57 off 64 balls, 8 fours, 1 six) and Kenul de Zoysa (70 off 97 balls, 8 fours, 1 six) and lead by 64 runs.

Army SC’s lower order came to their rescue to haul them up from a shaky 75-6 to an imposing 361-9 by the close against Ragama CC at Panagoda. An entertaining 152-run stand off 147 balls between Shehada Zoysa (82 off 73 balls, 14 fours, 1 six) and Captain Seekkuge Prasanna (84 off 117 balls, 7 fours, 4 sixes) was the feature of their batting. Late in the day Ratnarajah Thenurathan (82* off 73 balls, 8 fours, 3 sixes) and Theekshana Wickramasinghe (12*) rubbed more salt on the wound with an unbroken stand of 76 for the tenth wicket.

Buddhika Hasaranga (89 off 135 balls, 11 fours) and Thimira Malshan (91* off 116 balls, 9 fours, 2 sixes) shared a 117-run partnership for the eighth wicket to help Colombo Malay CC end the day on 272-9 against Galle CC at Moors SC grounds. Off-spinner Subhanu Rajapaksa had figures of 4/71.

Moratuwa SC’s veteran left-arm spinner Gayan Sirisoma took 5/81 to restrict Kandy Customs SC to 204-9 at Army grounds, Dombagoda. Lahiru Attanayake (51 off 109 balls, 4 fours) and Lakshan Gamage (52 off 99 balls, 7 fours) struck fifties apiece, but once they were dismissed Kandy Customs SC lost five wickets for 51 before bad light ended play early.

Left-arm spinner Mangala Pradeep produced his best figures 8/83 to dismiss Navy SC for 260 at Welisara. Asiri de Silva (65 off 110 balls, 5 fours, 2 sixes) and Thevindu Dickwella (50 off 68 balls, 5 fours, 1 six) stood out in the batting but their dismissals led to Navy SC losing their last seven wickets for 110 runs. By the close Leo CC had wiped out 68 runs losing three wickets and trail by 192 runs.

All these matches will continue on its second day today while Negombo CC and United Southern SC commence their match at Air Force ground, Katunayake today. [ST]

The Colombo stock market made a solid start in the first trading session for 2026 yesterday ending on the up and gaining more than Rs. 91.8 billion in value.

The ASPI ended 1.06% on the up, or 239.77 points to close at 22,864.08 and the S and P SL20 index was up 0.47% or 28.71 points to 6,186.09.

Market turnover was over Rs. 5.16 billion on nearly 133 million shares traded. Foreign investors were net sellers on a net outflow of Rs. 87.7 million.

First Capital Research said the Bourse commenced trading for 2026 on a positive note, with strong buying interest driving a sharp uptick at the opening bell.

A sharp surge at the opening bell signalled eager buying, after which the index settled into a calm, confident climb.

Top positive contributors to the ASPI were ACL, COMB, AEL, DFCC and DIPD. Retail investors took a major part in today’s market activity while HNW participation was at an average level.

Notable interest was observed in Capital Goods sector, particularly counters focused on manufacturing and marketing of cables and conductors, ranking among the highest turnovers for the day.

Additionally, property sector stocks edged higher over the course of the day. The Capital Goods sector contributed 46% of total turnover, while Materials sector and the Food Beverage and Tobacco sector together accounted for 18%.

”When you are in local government, you are on the ground, and you are looking into the eyes and hearts of the people you are there to serve. It teaches you to listen; it teaches you to be expansive in the people with whom you talk to, and I think that engagement gives you political judgment” – Valerie Jarrett, Chief Executive Officer of the Obama Foundation

Local governance is about managing public affairs at the community level. It involves Local Government, citizens, and organisations in making and implementing decisions for services like roads, sanitation, schools, and parks. It aims to be responsive, efficient, and representative of local needs through participatory processes like budgeting, planning, and service delivery. It decentralises power, bringing Government closer to people, fostering democracy, and tackling local development issues.

The question is whether local communities participate or have a say in any of the above activities in Sri Lanka. Overall, it appears that elections to Local Government authorities have become a referendum on the National Government and a hot bed for national political battles thereafter. While there may be some local bodies that are engaged in local governance involving local communities, broadly speaking, it appears that there is hardly any engagement with local communities to discuss, identify, agree on local priorities and monitor progress of such agreed priorities. There are no avenues or arrangements for local communities to meet councillors who they have elected and who supposedly represent them.

From all accounts, electing Local Councils at a huge cost to the taxpayers in the country appears to have been an absolute waste of money. If the elections were about fostering and furthering democracy, and about discussions on local issues, it has been a farce as far as the local communities are concerned as the focus has been about national partisan politics, and nothing to do with local issues.

The ideals of democracy

As the Museum of Australian democracy says, ‘democracy is fundamentally about discussion, often referred to as ‘government by discussion,’ because it relies on consultation, debate, and the free exchange of ideas among citizens to make informed decisions, manage differences, and ensure collective good through peaceful, inclusive dialogue rather than force. This ongoing conversation, requiring active listening and flexible thinking, sustains democratic life by allowing diverse viewpoints to be considered and integrated’.

The overall governance model in Sri Lanka, whether it is at National, Provincial or Local Government level, does not subscribe to the above ideal, and practice of democracy is more or less limited to a periodic vote to elect a National Parliament, Provincial Councils and Local Councils. Generally, this exercise too has hardly any direct engagement between those seeking election and those who are voting.

The recent Local Government elections that were conducted and the way some Councils were formed amply demonstrated the antithesis of what local governance should be, and the ideals of democracy. This has continued judging by subsequent developments in some Councils where budgets were defeated although Councils had been formed with majority support, either by one party or by way of coalitions. The elections themselves were about national politics and not about local issues and subsequent Council formations were based essentially to demonstrate either the popularity of the national policies of the Government, or the opposite of it by the Opposition, all in the quest of power rather than service to the local communities.

Addressing key elements of democracy

Looking towards the future, a genuine system change must occur when it comes to the practice of a truer sense of democracy at all levels of governance.

Hopefully, the new Constitution that is expected to be drafted after a consultative process, and presented for a referendum, will address a key element of democracy that is missing, that is, mechanisms for and the practice of discussion and debate between those seeking election and those who are voting, during elections and thereafter.

In respect of local governance, the following key aspects are highlighted for consideration by the elected Local Government Councils.

Shifting the emphasis from national issues to local community issues whilst providing avenues for the local communities to engage in discussing national issues.

Providing essential local services such as waste management, coordinating water supply and electricity supply, road maintenance, Local Government health services such as preventive health services and basic primary health services, developing parks and other recreational facilities, housing, including zonal planning, promoting and providing sports facilities and an efficient library service

Managing resources, enforcement of environmental regulations, and promotion of green initiatives like waste management and renewable energy.

Creating business-friendly environments, support local entrepreneurs, and develop green jobs to boost the local economy and create employment.

Citizen engagement involving residents and community groups in discussions and decisions that affect their lives through regular constituency meetings. Using online/offline methods (meetings, surveys, digital platforms) to involve residents, ensuring accessibility and representation for all groups (e.g., translated materials, accessible venues).

Acting as a link between citizens and the broader Provincial and National Government, reflecting local interests, points of view and concerns.

The need to develop five-year strategic plans for the Local Government entity that reflects the community priorities identified through discussions and a consultative process. Such plans should reflect the goals and objectives in respect of the priorities identified, action plans to achieve the objectives, funding estimated and allocated, and a monitoring mechanism to ensure compliance with the plan. The entities budget has to comprise of an estimated forward budget for 5 years based on the five-year strategic plan, and an annual budget that reflects actual allocations for the financial year. Such forward planning and annual reviews of plans adjusted, financial allocations made, will give a more certain outlook of the entity’s longer-term program of action to the local communities who have been engaged in developing such plans.

Engaging in data driven policy formulations that directly meet community needs, such as tailored housing or transport solutions.

These key aspects could be implemented now, including a mechanism to engage national parliamentarians in Local Government entity discussions. The Government and the Opposition could nominate and allocate a given number of Local Government entities to a Member of Parliament for that person/s to attend periodic meetings of the entities so allocated so that national priorities and how they apply to the local government entities and also an exchange of points of view on them may be facilitated through such an engagement. It needs to be mentioned, however, that the purpose of local governance should essentially be to serve the community of each Local Government entity and that it should not be to further the agenda of national politics and national political parties.

The best suited to serve

Ideally, there should be no partisan politics and political parties vying for power in Local Government entities. Members should be elected in their individual capacities and their ability to convince constituents that they are best suited to serve them. Partisan politics in Sri Lanka has been and still is so divisive it has not served citizens of the country as it should have. The divisiveness and lack of unity among national political parties in the face of the recent worst cyclone disaster Sri Lanka experienced amply demonstrates the damage such partisanship has done and still is doing to the country.

A well-functioning local governance model, with community interests and priorities and their participation in contributing to decision making and formulation of policies, will form the bedrock of a grassroots upwards political process. Few people in the National Parliament, Provincial Councils or Local Government entities should not wear the mantle of being the sole thinkers and decision makers, something which they have conferred on themselves. There is plenty of untapped knowledge and talent in the country and without doubt their engagement in policy settings will greatly benefit the country.

The Non-Bank Finance Company (FC) sector expanded sharply in the year to end-September 2025, with total assets growing 35.3% year-on-year (YoY) to Rs. 2.49 trillion, driven primarily by a strong increase in loans and advances, according to the Central Bank of Sri Lanka’s Financial Soundness Indicators (FSI) for the third quarter of 2025.

Net loans and advances rose 48.4% YoY to Rs. 1.99 trillion from Rs. 1.34 trillion at end-September 2024, reflecting an acceleration in credit growth. In contrast, investments declined by 4.5% to Rs. 334.3 billion from Rs. 350.1 billion a year earlier, indicating a balance-sheet shift towards lending activity.

Total liabilities, excluding equity, increased 42.5% YoY to Rs. 1.98 trillion at end-Q3 2025. Deposit liabilities rose 21.6% to Rs. 1.23 trillion, while borrowings more than doubled to Rs. 611.2 billion, up 120.2% from Rs. 277.6 billion a year earlier. Equity funds increased by 13.2% YoY to Rs. 511.1 billion.

Regulatory capital of the FC sector increased 16.7% to Rs. 418.1 billion, while risk-weighted assets expanded at a faster pace of 37.3% to Rs. 2.19 trillion. As a result, the total capital adequacy ratio declined to 19.1% at end-Q3 2025 from 22.5% a year earlier. Tier 1 capital stood at Rs. 389 billion, up 12.1% YoY. The total borrowings-to-equity ratio increased to 1.2 times from 0.6 times over the same period.

Asset quality improved markedly during the period, with the gross Stage 3 loans ratio declining to 6.8% at end-Q3 2025 from 12% a year earlier. Gross Stage 3 loans fell 18.3% YoY to Rs. 140.7 billion, while net Stage 3 loans declined 29.6% to Rs. 73.5 billion. Impairment coverage for Stage 3 loans improved to 47.7% from 39.3%.

The FC sector reported a profit after tax of Rs. 41.9 billion during the first six months of FY2025/26, up 59.3% from Rs. 26.3 billion in the corresponding period a year earlier.

Net interest income increased 26.6% YoY to Rs. 119.7 billion, while profit before tax rose 48.3% to Rs. 55.6 billion. Return on assets and return on equity increased to 6.9% and 17.2%, respectively, from 5.7% and 12.3% a year earlier.

Liquidity indicators moderated during the period, though remaining above regulatory thresholds. The ratio of liquid assets to total assets declined to 8.9% at end-Q3 2025 from 11.9% a year earlier. The credit-to-deposit ratio increased to 169.3% from 141.8%, while liquid assets to deposits and borrowings declined to 12% from 17%.