Sri Lanka’s 2026 Appropriation Bill reveals yet another jump in total government expenditure, rising by Rs. 3 billion compared to 2025, even as borrowing limits are cut, ministries reshuffle their spending, and questions grow over priorities in defense, health, education, and development.
The Appropriation Bill for 2026 has been officially gazetted and is set for its first reading in Parliament on September 26, ahead of the budget debate. According to the Bill, total government expenditure has been pushed up from Rs. 4,218.24 billion in 2025 to Rs. 4,545.64 billion in 2026.
Yet, while spending soars, the borrowing ceiling has been lowered. The government’s borrowing limit, which stood at Rs. 4,000 billion in 2025, has been reduced to Rs. 3,800 billion in 2026, raising questions about how these massive allocations will be funded.
Presidential Spending Skyrockets
The most striking change lies in the President’s development expenditure. Capital allocations for 2026 have jumped from a token Rs. 100 million in 2025 to a staggering Rs. 8 billion in 2026. Recurrent expenditure, however, remains steady at Rs. 200 million, while operational expenses have been trimmed slightly from Rs. 2.5 billion in 2025 to Rs. 2.4 billion in 2026.
The Prime Minister’s Office, on the other hand, has seen its recurrent expenditure cut sharply. The allocation drops from Rs. 1 billion in 2025 to Rs. 898 million in 2026, hinting at austerity in one corner of the government’s top ranks while other sections experience ballooning budgets.
Defense Holds Firm, Health Slides
The Ministry of Defense maintains its massive capital expenditure at Rs. 60 billion, unchanged from 2025, while its recurrent expenditure rises from Rs. 382 billion to Rs. 395 billion in 2026.
Health, a sector already under scrutiny, has seen both its recurrent and capital budgets reduced. From Rs. 449 billion in recurrent expenditure in 2025, the figure drops to Rs. 412 billion in 2026. Capital expenditure shrinks from Rs. 105 billion to Rs. 95 billion, sparking concern about funding for hospitals, medicine procurement, and public health programs.
Education Boosted, Transport Trimmed
The Ministry of Education, Higher Education and Vocational Training has gained significantly. Recurrent expenditure has risen from Rs. 206 billion in 2025 to Rs. 231 billion in 2026, while capital allocations have moved up from Rs. 65 billion to Rs. 70 billion, signaling stronger investment in schools, universities, and training.
In contrast, the Ministry of Transport, Highways, Ports and Civil Aviation has been hit with cuts in development. While recurrent expenditure inches up from Rs. 52 billion in 2025 to Rs. 56 billion in 2026, capital allocations plummet from Rs. 421 billion in 2025 to Rs. 390 billion in 2026. With the transport sector critical for connectivity and logistics, this reduction could strain infrastructure development.
Public Security and Other Increases
The Ministry of Public Security and Parliamentary Affairs has received notable increases in both recurrent and capital budgets. Recurrent allocations grow from Rs. 159 billion in 2025 to Rs. 175 billion in 2026, while capital expenditure moves from Rs. 16 billion to Rs. 18 billion, indicating heightened focus on law enforcement, security, and parliamentary activities.
The mixed allocations across ministries suggest shifting government priorities, but also raise concerns about transparency and long-term sustainability. With health funding falling while defense and presidential development projects soar, the debate over whether spending aligns with public needs is likely to intensify in Parliament.
Ultimately, while Sri Lanka’s 2026 Appropriation Bill outlines grand ambitions, the challenge lies in balancing soaring expenditures with shrinking borrowing limits, ensuring critical sectors are not sacrificed at the altar of political optics.
