Sri Lanka to increase 2027 capital spending by nearly 40%

Sri Lanka President Anura Kumara Dissanayake says the Government plans to allocate Rs. 2 trillion for capital expenditure in 2027, a nearly 40% increase, while reducing recurrent expenditure as part of efforts to increase investment in development.

The President said it is not justifiable, from the public’s perspective, to allocate a larger share of resources to maintaining government operations. He said the economic plans for the coming year aim to reduce recurrent expenditure, which currently stands at 9%, while increasing capital expenditure, currently at 4%, to support development.

President Dissanayake made these remarks while attending the Galle District Special Coordination Committee Meeting held yesterday afternoon (July 28) at the Galle District Secretariat.

During the meeting, a comprehensive review was conducted on the progress of development projects implemented by the Galle District Secretariat under the 2026 Budget, including the Galle District Development Plan, as well as the district’s financial requirements for 2027.

The President said every rupee received by the Treasury should be used for the country’s development and that the Government aims to build a financially disciplined nation without placing debt burdens on future generations.

He also said international assessments have shown positive developments in Sri Lanka’s economic progress and social indicators. According to the President, a country once recognised internationally for debt repayment difficulties and corruption-related challenges is now gaining recognition for improved economic performance and lower levels of corruption.

The President said the upcoming Budget gives special attention to improving the efficiency of the public sector through the digitalisation of government services, allowing citizens to access services from their homes. He added that the Government is also considering extending the retirement age in selected fields to retain experienced and skilled professionals in the public service.

He further said transforming the public sector into an employment-creation mechanism and weakening the state sector had caused economic difficulties. He stressed that the Government’s responsibility is to build an outward-oriented economy that creates more employment opportunities, particularly for young people.

The meeting also reviewed the progress of the Galle District Development Plan. The President said cities should continue to develop through proper planning to meet present and future needs.

Attention was also given to projects implemented by the Provincial Councils, with officials noting that around 90% of the physical work has already been completed.

The President was briefed on delays affecting some projects due to disputes between institutions and instructed officials to resolve such issues while working according to a unified national plan.

Officials also reviewed rural road development in the district. A total of 122 projects have been approved with an allocation of Rs. 250 million, while work on 57 projects has already been completed.

Progress under the Prajashakthi programme, which aims to address multidimensional poverty, was also reviewed. The programme includes projects focusing on strengthening the production economy, food security, the social environment, human resource development, supply chain access and social protection.

The meeting also discussed special allocations for the construction of Nil Sewana offices and the development of school playgrounds in the district. The President said building playgrounds alone is not enough to create a strong sports culture and stressed the need for programmes that encourage sports as part of daily life.

He said promoting sports can help address several social issues, including the drug menace, and that the Government is prepared to provide the necessary resources for sports development under a comprehensive national plan.

The President also said the Government has allocated Rs. 2 billion under the 2026 Budget to address the housing needs of children leaving detention centres and instructed officials to speed up the construction of houses so beneficiaries receive the intended support.

Housing programmes in the district, including the initiative providing Rs. 1 million in assistance for house construction, were also reviewed.

The meeting further discussed the implementation of the Rebuilding Sri Lanka programme, with the President stressing the importance of using the funds allocated for the Ditwah disaster within the current financial year.

Progress under the national “Ratama Ekata” (A Nation United) operation against illegal drugs was also reviewed. Officials said that since the operation began on October 30, 2025, authorities have carried out 12,608 raids in Galle District and seized 119.6 kilograms of illicit drugs. The President called for stronger coordination among all relevant institutions to dismantle drug networks in the district.

The meeting also reviewed the Galle City Development Plan, which includes developing Galle Fort as a tourism zone, transforming Galle into an economic hub and developing Mahamodara as an administrative zone.

President Dissanayake clarified that the temporary use of the Mahamodara and Bogambara prison facilities to accommodate inmates until renovations at Negombo Prison are completed does not mean they will become permanent prisons. However, he said the decision regarding Mahamodara Prison could be reconsidered.

Discussions also covered the proposed relocation of 18 government institutions, including the Police Station and Post Office, to Mahamodara, the construction of the new Galle Prison at Boossa, and urgent solutions to waste management issues, including the garbage disposal problem in Rathgama.

The meeting also focused on drinking water challenges in the district. Officials reviewed the progress of the Mahagodakanda and Baddegama water supply projects, as well as proposed community water projects in Mapalagama and Thawalama, while discussing immediate solutions to implementation issues.

The meeting was attended by Deputy Minister of Vocational Education Nalin Hewage, Deputy Minister of Fisheries, Aquatic and Ocean Resources Rathna Gamage, Southern Province Governor Professor Susiripala Manawadu, Members of Parliament Nishantha Samaraweera, T.K. Jayasundara, Nishantha Perera, Thilanka U. Gamage, Hasara Liyanage and Chanaka Madugoda, Galle Mayor Sunil Gamage, Galle District Secretary K.U. Chandralal, Chief Secretary Chandima C. Muhandiramge, senior government officials, heads of security institutions and other officials.