From Mandate to Measurable Change: How the NPP Victory Is Translating into Real Results
A Vote Against Distrust, Not Just for Power
Colombo Wire – Special Political Series
When Anura Kumara Dissanayake won Sri Lanka’s presidency in September 2024 as the candidate of the National People’s Power (NPP), the result was not merely an electoral upset—it was a profound political indictment. Voters did not rally behind the NPP because of nostalgia, charisma, or patronage. They voted because trust had collapsed elsewhere. Decades of governance dominated by the Rajapaksas, followed by the technocratic survivalism of Ranil Wickremesinghe, had hollowed out public faith in politics itself.
The NPP victory, therefore, was not a routine change of administration. It was a mandate anchored in a single, overwhelming expectation: trustworthiness. Sri Lankans did not ask for miracles; they asked for honesty, accountability, and a government that would stop treating the state as private property.
Now, with the NPP firmly in power, the central question is unavoidable: Has the government translated its moral mandate into practical governance? And more importantly, can President Anura Kumara Dissanayake convert his election pledges into sustainable economic and institutional outcomes?
Trustworthiness as the Core Political Currency
Unlike previous elections, the 2024 presidential race was not fought primarily on grandiose development promises or ethnic mobilisation. It was fought on credibility. The electorate had lived through policy capture, nepotism, opaque procurement, and state-sanctioned corruption. What they wanted was not another five-year plan, but a government that could be believed.
The NPP’s manifesto reflected this shift. Rather than headline-grabbing megaprojects, it emphasised process: transparent budgeting, accountable governance, merit-based appointments, and the dismantling of informal power networks. Trustworthiness was not framed as a moral slogan but as a governing principle.
So far, this emphasis has not remained rhetorical. One of the most visible changes under the NPP administration has been the absence of scandal—a striking departure in Sri Lankan politics. No emergency tenders quietly awarded to political allies. No sudden enrichment of ministerial families. No policy reversals benefiting shadow business interests.
In a political culture accustomed to “business as usual,” this restraint itself has been transformative.
Budgeting as a Statement of Intent
If credibility is tested anywhere, it is in the national budget. The first NPP budgets have been scrutinised intensely, not just for allocations but for intent. Do the numbers align with the promises made to voters?
A close reading shows a clear pattern. Public spending has been redirected away from politically inflated vanity projects and towards rural development, education, agriculture, and social protection. These are not symbolic gestures; they are structural reallocations.
Rural infrastructure funding has prioritised productivity rather than optics—irrigation rehabilitation, farm-to-market access, and digital connectivity. Education spending has moved beyond urban elite schools to vocational training, technical institutes, and regional universities, addressing long-standing skills mismatches in the labour market.
Agriculture policy, long distorted by populist fertiliser experiments and ad hoc subsidies, has been recalibrated towards sustainability, research-driven productivity, and farmer income security. These changes do not produce immediate political theatre, but they build long-term economic resilience.
Debunking the Opposition’s Budget Narrative: Why the NPP’s 2026 Fiscal Framework Is Being Deliberately Misrepresented
The opposition’s critique of the NPP’s 2026 budget relies less on macroeconomic analysis and more on selective arithmetic, political theatre, and a fundamental misunderstanding of how post-bankruptcy fiscal management works under an IMF-supported restructuring programme. What is being presented as “economic exposure” is, in reality, a collection of half-truths stripped of context, time horizons, and balance-sheet realities.
This budget must be evaluated against one unavoidable fact: Sri Lanka is still a sovereign in recovery, operating under constrained fiscal space, debt ceilings, and primary balance targets negotiated with external creditors. Any serious analysis must begin there.
The Myth of the “1 Trillion Rupee Surplus”
The claim that the Treasury is “overflowing” with a 1 trillion rupee surplus is economically illiterate. What exists is a temporary cash-flow improvement, not a structural surplus. Vehicle import taxes created a one-off revenue spike driven by pent-up demand following years of import controls. This is not recurring revenue and therefore cannot be responsibly used for permanent tax cuts or expenditure commitments.
Using windfall revenues for recurrent spending is precisely the fiscal indiscipline that bankrupted Sri Lanka in the first place. The NPP’s decision to sterilise this revenue—using it to strengthen reserves, meet primary surplus targets, and reduce domestic borrowing pressure—is orthodox, IMF-consistent, and fiscally prudent.
As for VAT threshold adjustments, the opposition deliberately ignores two facts:
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VAT compliance in Sri Lanka remains among the weakest in Asia.
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The threshold change is paired with digital enforcement, exemptions for micro-operators, and input credit mechanisms that reduce net tax incidence.
This is not “taxing the poor”; it is broadening the base to reduce future rate hikes.
The Housing Allocation: Capital Phasing vs Political Arithmetic
The claim that the government is building “100-square-foot houses” is a textbook example of bad-faith accounting. The 10.2 billion rupee allocation is Phase One capital expenditure, not the total project cost. Housing programs are structured across multi-year appropriations, land grants, provincial co-financing, and beneficiary credit schemes.
Moreover, construction cost estimates cited by the opposition deliberately use urban private-sector benchmarks, not state-assisted rural or semi-urban models that rely on:
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Standardised designs
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State-supplied materials
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Labour subsidies
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Community participation frameworks
This model has been used successfully in post-tsunami and post-war housing projects. To present Phase One allocations as “per-house totals” is either incompetent or intentionally misleading.
State Worker Housing Loans: Misunderstanding Credit Design
The “416 worker” argument collapses once basic banking principles are applied. The 500 million rupee allocation is not a giveaway pool; it is a credit guarantee and interest subvention mechanism designed to leverage commercial bank lending at scale.
Every rupee allocated enables multiple rupees of private credit, depending on the guarantee ratio. This is how modern housing finance works. The opposition’s framing assumes a cash handout model that no fiscally responsible government would adopt.
On building material taxes, the NPP has already signalled a phased rationalisation linked to revenue neutrality, not reckless tariff abolition that would blow a hole in the fiscal framework.
Borrowing and the Fiction of “No System Change”
The criticism of 3.8 trillion rupees in borrowing deliberately ignores debt rollover mathematics. A significant portion of this figure relates to refinancing existing obligations, not new deficit spending. Gross borrowing figures without net context are meaningless.
As for currency stabilisation, the opposition’s attempt to claim credit for macro stability ignores the political cost of that “stability”: suppressed imports, frozen wages, and social pain absorbed by citizens—not politicians. The NPP inherited stabilisation; it did not inherit sustainability. That is what this budget attempts to build.
Industrial Transformation: From Rhetoric to Policy Architecture
Perhaps the most ambitious component of the NPP programme has been its commitment to transform Sri Lanka’s industrial sector. Previous governments spoke endlessly about industrialisation while quietly privileging import monopolies and politically connected traders.
The NPP approach has been notably different. Industrial policy has been framed around value addition, export competitiveness, and domestic supply chain development, rather than rent-seeking. Licensing regimes that once functioned as political gatekeeping tools have been rationalised. Tendering processes have been opened, digitised, and standardised.
This has had two immediate effects. First, it has reduced opportunities for underhand deals. Second, it has restored a measure of confidence among legitimate investors—both domestic and foreign—who were previously discouraged by opaque rules and informal “entry costs.”
While industrial transformation is necessarily a medium-term project, the policy architecture now in place suggests seriousness rather than symbolism.
Employment, Stagnation, and Economic Confidence
Sri Lanka’s post-crisis economy has been defined by stagnation and underemployment. Young people, in particular, voted for the NPP because they saw no future under the existing political-economic model.
The government’s response has focused on employment-linked growth, not artificial stimulus. By expanding opportunities in tourism, agriculture-based industries, logistics, and light manufacturing, the NPP administration has sought to generate jobs that are tied to real economic activity.
Early indicators suggest modest but genuine improvements. Tourism revenues have increased as policy stability and international engagement have improved Sri Lanka’s image. The government’s handling of tariff negotiations with the United States has signalled competence rather than confrontation, preserving market access while protecting domestic interests.
Meanwhile, renewed engagement with China—particularly in relation to Hambantota—has been framed not as dependency but as negotiated investment. Japanese and Indian investments in infrastructure, energy, and manufacturing remain in the pipeline, reflecting a balanced foreign economic strategy rather than alignment with any single power bloc.
Youth, SMEs, and the Politics of Impatience
The opposition’s list of “betrayals” confuses sequencing with abandonment.
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Public sector recruitment is postponed because an overstaffed, inefficient state was one cause of fiscal collapse.
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Tax thresholds cannot be lifted without replacing revenue elsewhere—a lesson Sri Lanka learned the hard way.
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Freelancer taxation is part of income normalisation, paired with deductions, export facilitation, and foreign currency retention incentives.
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The SME “Relief Bank” is being structured as a development finance window, not a populist credit dump.
This is reform, not retreat.
Foreign Revenue and Strategic Economic Diplomacy
One of the most underestimated shifts under President Dissanayake has been the professionalisation of economic diplomacy. Instead of using foreign policy as a stage for personal diplomacy or domestic posturing, the NPP government has treated it as a revenue-generating instrument.
Tourism promotion has been depoliticised and data-driven. Trade negotiations have been handled by professionals rather than political intermediaries. Foreign investors have encountered a state that speaks with one voice, rather than multiple informal centres of power.
This coherence matters. In a country emerging from default, credibility is currency. The NPP government has understood that trustworthiness must extend beyond domestic voters to international partners.
FDI, Exports, and the SVAT Transition
FDI accounting standards do not change based on political convenience. Ongoing investments count as FDI because capital inflows occur over time, not at signing ceremonies. To suggest otherwise is to invent a parallel statistical universe.
On SVAT, the cash-flow disruption is real—but transitional. The refund mechanism is being digitised precisely because the old system was a corruption playground. Short-term friction is the price of long-term efficiency.
Breaking the Cycle of Cronyism
Perhaps the clearest fulfilment of the NPP’s election pledge has been its refusal to weaponise policy for private gain. Under previous administrations, economic policy often functioned as a redistribution mechanism for political families and business associates—licenses, contracts, tax exemptions, and regulatory favours quietly channelled to insiders.
Under the NPP, this pattern has been disrupted. Ministers have not installed relatives in key positions. Friends and associates have not been quietly absorbed into ministries or state-owned enterprises. Procurement processes have been subjected to oversight.
This may appear modest in theory, but in Sri Lanka’s political history, it is revolutionary. It has reasserted the idea that the state belongs to citizens, not office-holders.
Institutional Reform: Police, Judiciary, and the Civil Service
Trustworthiness also depends on institutions. The NPP government moved early to address long-standing credibility issues within the police and judiciary, including the removal of a controversial Inspector General of Police. These actions were not framed as purges, but as institutional corrections.
At the same time, transparency mechanisms have been strengthened across departments. Digital reporting, public disclosures, and audit trails have reduced discretionary abuse.
Resistance has been inevitable. Sections of the civil service, appointed or promoted under previous regimes, have attempted to slow or sabotage reform initiatives. This institutional inertia is one of the government’s most serious challenges.
Crisis as Catalyst: Post-Cyclone Acceleration
Ironically, it was the aftermath of Cyclone Ditwa that marked a turning point. Faced with an immediate humanitarian and logistical crisis, the government was forced to bypass bureaucratic lethargy and fast-track decision-making.
The result was revealing. When political will aligned with administrative urgency, projects moved. Relief was delivered without political branding. Reconstruction planning was coordinated rather than fragmented.
This episode demonstrated that state capacity had not disappeared—it had merely been suppressed by years of politicisation. The NPP government’s challenge now is to institutionalise this efficiency beyond moments of crisis.
A Promise in Motion, Not Yet Complete
Has President Anura Kumara Dissanayake kept the promise that brought him to power? The honest answer is that he has kept the most important part: trustworthiness.
Policies are no longer designed to benefit friends, families, or political financiers. Budgets reflect stated priorities. Institutions are being cleaned, not captured. Economic engagement is strategic, not opportunistic.
The transformation is not complete, and it will not be painless. Structural change never is. But for the first time in decades, Sri Lankan voters can reasonably say that their mandate has been respected.
In a country exhausted by betrayal, that alone is a profound political achievement. The task ahead is to ensure that trustworthiness evolves from a governing ethic into a durable system—one that outlives any single leader, party, or election.
This is the second instalment in Colombo Wire’s ongoing series examining how the National People’s Power electoral victory is being translated into tangible outcomes, and whether President Anura Kumara Dissanayake can sustain the trust that propelled him to office. Beyond campaign rhetoric and symbolic gestures, this series assesses the practical realities of governance—policy choices, institutional reform, and economic management—to determine whether the promise of systemic change is evolving into measurable results under an administration operating within the constraints of a post-bankruptcy Sri Lanka.