News
Budget 2026 aims to revive mega projects
View(s):- Settling domestic arrears and retaining the freeze on state-sector vehicle purchases among other priorities
By S. Rubatheesan
The 2026 national budget will give priority to stalled mega-infrastructure projects and settling domestic arrears, while the current freeze on new vehicles for state institutions, except for public transport and healthcare, will continue, according to the budget call issued by the Treasury.
The suspension of funds for foreign training and public transportation will continue till next year, according to the document.
These are among the comprehensive guidelines issued by Treasury Secretary Dr. Harshana Suriyapperuma on preparing annual budget estimates to all ministry secretaries, chief secretaries of provincial councils, and heads of state entities.
Accordingly, priority is to be given to the settlement of domestic arrears and the implementation of budget proposals aimed at private sector growth, along with allocating resources for ongoing projects and other multi-year commitments, the document said.
It noted that the country’s economy has entered a sustainable trajectory in fiscal stability as a result of attentive reforms of the government and the difficult sacrifices endured by the public. “However, the continuation of further reforms and maintenance of fiscal discipline remain critical, and these achievements do not signify a time for complacency.”
The primary expenditure ceiling for next year is set at Rs 4,385.4 billion (4,385,400 million or 4.3854 trillion), according to the Treasury, as it details the guidelines on budget estimates in keeping with the Medium Term Fiscal Framework 2026-2030.
The freeze on state-sector vehicle purchases imposed earlier will remain in effect. However, vehicles for health service delivery, public transport, utility, and other non-passenger transport purposes will be considered on a case-by-case basis.
Any new projects shall be made from the Public Investment Programme (PIP) and shall be based on the recommendations of the Public Investment Committee. The final decision on project selection will be made by President Anura Kumara Dissanayake in his capacity as Finance Minister.
The temporary halt on capacity development for foreign training that has to be paid from the Consolidated Fund also will remain intact until further notice, the document added.
Noting that Statutory Funds are being maintained in some state entities as idle deposits, without being utilised for the purposes for which they were established, the Treasury said such practices should be discontinued and proposals should be prepared for development-oriented projects that align with the objectives and legal mandates of those respective funds.
The ministries are encouraged to coordinate with the Ministry of Rural Development, Social Security and Community Empowerment, and the “Prajashakthi” Secretariat established under the Presidential Secretariat regarding development needs at the village level, as they have developed an Integrated Village Development Plan including all Grama Niladari Divisions.
The Treasury Secretary also noted that there was a pressing need to shift the country’s economic strategy towards a higher growth trajectory. “Unless this shift takes place, further reforms in the fiscal sector will not be sustainable.”
To implement this, the government has planned to create a widespread sense of development throughout the society by reducing disparities among social groups under the theme of “A Productive Economy Fosters the Engagement of Everyone in Economic Development”.
All budget estimates by state entities are to be submitted to the Treasury before July 31.
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