By Asoka S. Seneviratne –

“We did not inherit a clean slate—we inherited the ashes of corruption, debt, and betrayal. Yet, I firmly believe that from these ashes, we will build a nation of dignity, justice, and prosperity. The sacrifices of today are not losses—they are the foundation of tomorrow’s freedom in all senses.” – President Anura Kumara Dissanayake

The loudest voices of criticism today do not come from the majority of ordinary citizens or the country’s intellectuals. They come instead from the remnants of the defeated political establishment, the same forces swept away by the people’s mandate in the last two electoral tsunamis. Their accusations follow a familiar script: that the AKD-led government is (a) suppressing trade union actions, (b) failing to fulfill its election promises, and (c) dragging the country toward another crisis.

What these voices deliberately conceal is the harsh reality that confronted the government only after taking office. The actual depth of Sri Lanka’s austerity trap—one of the sharpest and fastest in modern history—was not fully visible before power was assumed. The new administration inherited not only a bankrupt economy but also decades of broken promises, mismanagement, and corruption that had hollowed out public institutions and deepened the people’s suffering.

It is within this hostile context that opposition remnants, unable to accept their rejection at the ballot box, now attempt to regroup under one banner with a single aim: to topple the government at any cost, regardless of the consequences for the nation.

And yet, despite these significant obstacles, the National People’s Power (NPP) government—guided by the vision and resolve of President Anura Kumara Dissanayake—marked its first year in office on September 21, 2025. This paper aims to cut through political propaganda noise, offer a clear and analytical review of the challenges faced, and evaluate how the government has navigated its first year in power, focusing on restoring dignity, stability, and hope to the people of Sri Lanka.

The Government is Not Against the Right of Trade Unions

Before assuming power, the NPP and its affiliated trade unions (TUs) were at the forefront of worker struggles. They boldly organized work-to-rule campaigns, strikes, and other collective actions to hold previous governments accountable. These actions were not reckless; they were a direct response to decades of betrayal by rulers who left the people suffocating under an economy poisoned by corruption, bribery, mismanagement, lawlessness, and political abuse. The Aragalaya of 2022 was the inevitable outcry of a nation pushed to the brink, and its scars need no repetition.

Now in government, President Anura Kumara Dissanayake and the NPP have taken a principled stand: trade union rights remain fully protected as an inseparable part of democracy. Strikes, work-to-rule campaigns, and other lawful actions are not banned, because silencing workers is never an option in a genuinely free society.

However, with rights come responsibilities. The welfare and well-being of the broader public must not be sacrificed in the name of protest. People who once endured under corrupt regimes must not be made to suffer again due to disruptions in essential services. Therefore, while workers’ rights are protected, law and order will also be strictly maintained. This balance—protecting democratic freedoms while preventing harm to the public or risking national security—is the foundation of the AKD government’s approach.

Among many, CEB Reforms-A Non-Negotiable Reality Today

For a decade, among many, the Ceylon Electricity Board (CEB) has been a financial black hole, draining public funds and accumulating debt. Between 2013 and 2023, it recorded a staggering Rs. 412.1 billion in losses, followed by another Rs. 17.3 billion in 2024. No country can sustain such a burden forever. The CEB is now a key part of the IMF’s US$3 billion program, but let’s be clear: even without the IMF, these reforms are essential. To provide electricity at fair and affordable prices, the Board must be transformed. Anything less is reckless and irresponsible.

This is not about political ideology, union slogans, or past rhetoric. It is about economic survival. A loss-making CEB drains resources that should be invested in schools, hospitals, and job creation. Every rupee wasted on inefficiency is a rupee stolen from the people. This is the naked truth of economics. When in opposition, the NPP could afford to resist reforms. But in government, there is no such luxury. The economy has changed, the stakes are higher, and the people cannot wait. This is ground reality.

So, the truth is simple that the people and the economy must come before politics. Reforming the CEB is not optional—it is a duty. When the economy is well organized and managed, its benefits will go to all and the country. To delay further is to betray the very citizens who gave this government its mandate.

What Must Be Done Now

To reverse the CEB and safeguard the nation’s economic recovery, the government must act immediately on four fronts.

* Reduce Waste and Stop Financial Leaks: Enforce strict auditing and transparency to break the cycle of inflated contracts, corruption, and mismanagement that have affected the CEB for years. Every dollar saved from waste is a dollar available for development.

* Restructure Debt and Modernize Operations: The government needs to develop a clear plan to manage CEB’s substantial debts while investing in new technology and improving grid management. A leaner, more efficient CEB will reduce costs and help keep electricity prices stable.

* Diversify Energy Sources: Heavy dependence on expensive imports has weakened the sector. Increasing renewable energy—such as solar, wind, and hydro—will reduce losses, enhance energy security, and lower electricity costs over time.

* Protect Low-Income Consumers: While reforms are necessary, everyday people should not be burdened. A fair subsidy system for vulnerable households must be combined with efficiency reforms, ensuring the poorest are protected while the system is improved.

Sri Lanka’s Harsh Reality: AKD Government Confronts Austerity Shock

When President Anura Kumara Dissanayake (AKD) and the National People’s Power (NPP) took power in late 2024, they made a bold promise: end corruption, rebuild the economy, and restore dignity to ordinary people. However, what the government didn’t fully expect was how severe the austerity trap it inherited would be.

The recent World Bank report, The World Bank’s Sri Lanka Public Finance Review, confirms what Sri Lankans face every day: the country has gone through one of the most severe and rapid austerity periods in modern history. Years of limited investment, falling wages, and neglect of vital infrastructure have left the new government with little room to act. This is the harsh reality that no one can deny.

The Austerity Shock, the Government did not see coming

The above-mentioned World Bank’s Sri Lanka Public Finance Review compares 330 austerity experiences in 123 countries since 1980. Sri Lanka’s fiscal cuts between 2021 and 2024 stand out among the most extreme anywhere. For the AKD government, the reality became clear only after taking office:

* Nearly three-quarters of all fiscal cuts came from reducing public investment, which limited economic growth.

* Roads, hospitals, and transportation networks were left in disrepair, severely compromising the nation’s welfare and well-being.

* The industrial sector declined by 25% in 2022–23, eliminating jobs and slowing economic growth. Hope for a brighter future has been diminished.

Essentially, the country has missed nearly a decade of progress. GDP is not projected to return to 2018 levels until 2026. The new government did not start with a clean slate. Instead, it inherited (i) a host of structural issues, (ii) crumbled sectors, and (iii) unfulfilled promises from the past.

Regarding the unfulfilled promises from the past, among many, I can give the following examples:

• CEB and Energy Sector Mismanagement

Previous governments promised reliable and affordable electricity, but the CEB accumulated massive losses of over Rs. 412 billion (2013–2023), failing to modernize infrastructure or maintain supply. Frequent power cuts and rising tariffs left households and businesses burdened.

• Public Investment and Infrastructure Neglect

Roads, hospitals, and public transport were repeatedly promised upgrades, yet decades of underinvestment left much of the rural road network unpaved, hospitals outdated, and public buses and trains in disrepair. This caused stagnation in industrial growth and limited access to basic services.

• Corruption and Accountability Failures

Successive administrations pledged to eradicate corruption, mismanagement, and bribery, yet large-scale embezzlement of state funds persisted, undermining development programs and widening inequality. Projects were delayed or abandoned, and ordinary citizens continued to bear the cost in all senses.

• The President’s Fund

The President’s fund was meant to help the poor and the needy. However, it turned into daylight robbery by politicians, their associates, and a few elites.

Poverty Deepens,  Wages Fall

* Behind all of this is the human toll: more than a quarter of Sri Lankans live below the poverty line. Another third are just above it, vulnerable to shocks. Real wages are 14–24% lower than pre-crisis levels, with public servants being the most severely affected.

* The consequences are widespread: families skipping meals, children leaving school early, and a surge of skilled workers emigrating. Between 2022 and 2024, nearly 1,500 doctors left the country, costing taxpayers millions and leaving hospitals understaffed. This is hardly the foundation any new government would want.

* The Debt Bomb. Interest payments eat up almost 9% of GDP, leaving little for schools, hospitals, or infrastructure. With nearly half of government revenue going to creditors, no government can fully meet its promises. AKD’s administration, committed to people-first governance, now faces the harsh reality that the debt trap crowds out social investment. Without deeper restructuring or cancellation, austerity will continue to dominate policy, regardless of political will.

AKD’s Challenge: Promises vs. Reality

The NPP came to power with bold pledges: rebuild industry, create jobs, and deliver dignity to citizens. But structural realities mean:

* Growth remains weak due to years of underinvestment.

* Poverty is worse than initially understood.

* Fiscal space is minimal, with IMF guidelines restricting spending.

This doesn’t mean AKD’s promises were false—it means they were caught off guard by reality. Achieving them demands creativity and courage: advocating for fairer debt treatment, focusing on capital investment in productive sectors, and safeguarding the most vulnerable without disrupting the recovery.

In view of economic growth, the economy continues to be weak because of years of underinvestment. Poverty is more severe than initially thought. Fiscal space is minimal, with IMF guidelines restricting government spending.

Steps Forward

To navigate this crisis, the AKD government must act decisively:

* Rebuild capital investment in industry and infrastructure to revive growth and employment.

* Protect vulnerable populations with targeted subsidies and social programs, ensuring austerity does not deepen suffering.

* Negotiate internationally for better debt terms and access to technology, easing the pressure on government revenue.

* Maintain public trust and transparency, ensuring people understand the trade-offs while reforms take effect.

Walking a Tightrope

Sri Lanka’s austerity measures are some of the toughest in recent decades. The AKD government didn’t create this situation, but it must operate within it. The challenge is clear: how to meet election promises when economic growth remains slow, poverty worsens, and creditors demand more. If the government can combine fiscal discipline with bold reforms in industry, agriculture, and governance, Sri Lanka still has a chance to turn around. But the path is narrow, requiring two main things: the patience of the people and their ability to stay hopeful—believing that today’s sacrifices will lead to tomorrow’s prosperity. The above is possible because hands of the government are clean & pure in all senses which is opposite of the past. Without this shared belief, the journey to full recovery may be limited. Still, steps toward lasting change have been outlined.

The Government Has so far not fulfilled its Election Promises

The above is the biggest cry by the opposition. However, while facing & tackling the shocks of austerity measures, there are substantial achievements for the people and the country by the government within one year of transformation.

On 21 September 2025, President Anura Kumara Dissanayake and the National People’s Power (NPP) government completed their first year in office. They inherited a nation crippled by corruption, debt, and social disorder, and bound to an IMF program with some of the harshest austerity measures in modern history. Few governments have ever begun their journey under such difficult circumstances.

Yet, in just twelve months, the administration has taken bold steps to stabilize the economy, restore public trust, and lay the groundwork for long-term recovery. With wide-ranging reforms aimed at transparency, accountability, and people-centered governance, the NPP has marked a decisive break from the failures of the past and placed Sri Lanka on a new path toward transformation.

Stabilizing a Collapsed Economy

The government’s most urgent task was to rescue a bankrupt nation. Through decisive reforms:

Debt Relief – Secured agreements with China and international creditors to restructure debt, easing near-term repayment pressures.

Revenue Gains – Tax collection surged by nearly 26%, reaching Rs. 2.3 trillion in the first half of 2025.

Budget Control – The deficit was slashed from a projected Rs. 2,200 billion to Rs. 406 billion, showing unprecedented fiscal discipline.

Reserves Restored – Foreign exchange reserves rose to $7 billion, ensuring stability in imports, currency, and investor confidence.

The most explicit recognition of these efforts came from Standard & Poor’s Global Ratings, which upgraded Sri Lanka from “default” to “CCC+”. This boosted international confidence and showed that the recovery, although fragile, is real. In short, this forms the basis for a prosperous future that the opposition struggles to accept.

Eradicating Corruption

Breaking with the past, the AKD government launched the most aggressive anti-corruption campaign in Sri Lanka’s history:

Internal Affairs Units (IAUs) are established in ministries to ensure integrity.

National Anti-Corruption Action Plan (NACAP) launched in April 2025.

The Proceeds of Crime Act (POCA) was passed, empowering the state to trace and seize illicit wealth.

Special Investigations launched into Sri Lankan Airlines and Airport & Aviation Services.

This sent a strong message: corruption is no longer sheltered, and public service must prioritize the people—not politicians.

Protecting People Amid Austerity

Even with limited resources, the government ensured people were not abandoned:

Public Salaries – Minimum state salary increased from Rs. 24,750 to Rs. 38,750, the largest ever adjustment.

Health Services – Rs. 6 billion allocated to strengthen hospitals, establish 100 new primary healthcare units, and cut medicine prices.

Pensions – Enhanced with Rs. 10 billion in new allocations, protecting retirees from poverty.

Disaster Relief – Compensation for victims raised fourfold, offering dignity in crisis.

These steps proved that austerity does not mean neglecting people’s welfare.

Reviving Industry and Jobs

A cornerstone of the government’s vision is reviving production and creating jobs:

* Rs. 1.35 trillion committed to industrial promotion.

* Revival of the Valachchenai Paper Factory and Elephant Pass Salterns.

* 1,000 entrepreneurs supported with start-up funding up to Rs. 25 million.

* New industrial zones launched in Ingiriya, Katunayake, Dambulla, and Sooriyawewa.

These measures are laying the groundwork for job creation, export growth, and balanced regional development.

Strengthening Global Partnerships

The AKD government has also rebuilt Sri Lanka’s global reputation:

India – New defence and renewable energy partnerships, including a solar power initiative.

China – Expanded investment under the Belt and Road Initiative.

Regional Ties – Strengthened links with Vietnam and the Maldives, marking 60 years of friendship.

Foreign Investment – Direct investment doubled, with FDI inflows up 101% in the first half of 2025.

Sri Lanka is no longer isolated but respected as a partner on equal terms.

A New Political Culture

Perhaps most importantly, the NPP government has shown that politics can be different:

* Cut excessive privileges for MPs and former presidents.

* Abolished special pensions and perks.

* Reinforced the principle of equality before the law.

This has started to rebuild public trust in government and foster a culture of accountability.

Looking Ahead

The path remains narrow and challenges are far from over: debt is still high, poverty is severe, and growth is fragile. However, the first year of the AKD government has demonstrated that recovery and reform are achievable.

By stabilizing the economy, fighting corruption, protecting public services, reviving industry, and rebuilding global trust, the administration has laid the foundation for a new Sri Lanka.

The work isn’t finished yet, but the path is clear: a people-centered, corruption-free, and prosperous nation.

Summary: A Turning Point for Sri Lanka

On September 21, 2025, President Anura Kumara Dissanayake (AKD) and the National People’s Power (NPP) government completed their first year in office. They inherited a nation crippled by debt, corruption, and decades of broken promises, bound to one of the harshest austerity programs in modern history. Yet, in twelve months, the administration has made bold strides in stabilizing the economy, restoring credibility, and rebuilding public trust. The deficit was slashed from Rs. 2,200 billion to Rs. 406 billion, reserves rose to $7 billion, and global ratings upgraded Sri Lanka from “default” to “CCC+.” The government also launched the most aggressive anti-corruption drive in Sri Lankan history, passed the Proceeds of Crime Act, and strengthened accountability across ministries. People were not left behind: public salaries increased significantly, healthcare funding expanded, pensions were strengthened, and industries were revived with new investments and job opportunities. Sri Lanka has also re-emerged globally, securing stronger ties with India, China, and regional partners, while doubling foreign direct investment.

Conclusion: The Vision and Wisdom of AKD

The first year of the AKD government has shown that clean hands, clear vision, and firm resolve can achieve what decades of corruption and political opportunism could not. President Anura Kumara Dissanayake has proven that leadership is not about empty slogans but about courage to act, honesty to confront reality, and wisdom to balance austerity with compassion. Indeed, workers’ democratic rights are accepted, respected, and preserved. The path ahead remains narrow, with debt and poverty still weighing heavily on the nation. Yet, Sri Lanka today has something it lacked for decades: a government that puts the people before privilege, transparency before corruption, and long-term recovery before short-term politics. This is the foundation of a new political culture—one rooted in dignity, accountability, and fairness; however, the opposition struggles to digest the above. The journey is far from over, but under AKD’s vision and wisdom, “Sri Lanka now walks a path that cannot be broken. It is a path built not on empty promises but on sacrifice, honesty, and vision. The people’s struggles today are not meaningless—they are the seeds of tomorrow’s prosperity, dignity, and freedom. Guided by the wisdom and resolve of President Anura Kumara Dissanayake, the nation is rising from its darkest chapter toward a future where every citizen can stand tall with hope, pride, and unshakable belief that this time, the journey will not fail. This is the promise of a new Sri Lanka—one born from pain, but destined for lasting prosperity.

*The writer served as the Special Adviser to the President of Namibia from 2006 to 2012 and was a Senior Consultant with the UNDP for 20 years, and a Senior Economist with the Central Bank of Sri Lanka (1972-1993). He can be reached at asoka.seneviratne@gmail.com