Parliament approves uncontested Rs. 500 b supplementary estimate

• Public Finance Management Act allows for expenditure to breach Appropriation Bill limits under special circumstances, CoPF told 

Parliament yesterday approved the 2026 Rs. 500 billion supplementary estimate for post-Ditwah relief and recovery, concluding a two-day special sitting for that purpose.

The estimate was uncontested and passed without a vote in the 225-member assembly.

The previous day, the Committee on Public Finance (CoPF) approved the Rs. 500 billion supplementary estimate, the Parliamentary Secretariat said.

The approval was granted at a meeting of the CoPF chaired by Main Opposition MP Dr. Harsha de Silva, following submissions by officials from the Finance Ministry.

Officials told the Committee that although the Appropriation Bill for 2026 was passed by Parliament on 5 December, the recent disaster situation had created the need to mobilise additional resources beyond the amounts provided for in the Budget.

Accordingly, a supplementary sum of Rs. 500 billion has been proposed to support affected communities, restore livelihoods and rehabilitate damaged infrastructure.

The allocation comprises Rs. 100 billion for the renovation of houses destroyed by the disaster, Rs. 250 billion for the restoration and rehabilitation of damaged infrastructure, and Rs. 150 billion to support the rebuilding of livelihoods and the return to normal living conditions.

During the debates, Opposition lawmakers questioned the adequacy of the supplementary estimate and credibility of initial impact assessments. They points out that while the Government is allocating Rs. 250 billion for post-Ditwah infrastructure repairs to bridges, roads, railways, irrigation systems, schools and hospitals, the Road Development Authority also has estimated Rs. 190 billion in damages to road networks. On Wednesday, making a point for Government to consider issuing infrastructure bonds, SEC Chairman Senior Prof. Hareendra Dissabandara said he had learnt that repairing damages to the railway network alone required Rs. 200 billion. 

CoPF observed that the supplementary estimate would result in primary expenditure for 2026 exceeding the 13% of GDP ceiling imposed by the Public Finance Management (PFM) Act by about 1.5% of GDP.

Officials explained that under Section 16 of the PFM Act, such a breach is permitted in cases of unforeseen and unavoidable circumstances, including natural disasters and national crises. In line with Sections 16 and 26 of the Act, the Ministry of Finance has submitted the required explanatory documents, including an updated Medium-Term Fiscal Framework (MTFF).

When questioned on compliance with the PFM Act, officials reiterated that while the primary expenditure ceiling is mandatory, statutory exemptions apply in disaster-related situations.

The Committee also examined beneficiary selection and implementation mechanisms. Officials said the National Building Research Organisation (NBRO) has identified around 15,000 houses requiring attention, noting that a related program has been in place since 2017, though progress has been slow. 

They further stated that the 2026 Budget has allocated Rs. 5 trillion to construct approximately 3,000 houses already identified, with additional funds to be provided for restoration and relocation.

CoPF members stressed the need for accurate data and a clear implementation plan to ensure assistance reaches households directly affected by the disaster.

The Committee also urged the Government to formally establish the Rebuilding Sri Lanka Fund as a statutory fund with Parliamentary approval, to strengthen accountability and transparency in the use of disaster-related funds.

Following deliberations, the Committee approved the supplementary estimate of Rs. 500 billion.