The Government recently introduced several initiatives aimed at digital transformation, with significant emphasis given to the digital economy in Budget 2025 as well. Key initiatives include the GovPay digital payment platform, expanded President’s Fund services to Divisional Secretariats, and the eBMD system for online issuance of birth, marriage, and death certificates via embassies. 

More significantly, Budget 2025 proposed the Sri Lanka Unique Digital ID (SLUDI), a crucial and long-awaited pillar in digital transformation, critical to achieving a $ 15 billion digital economy.

In an interview with The Sunday Morning Business, Federation of Information Technology Industry Sri Lanka (FITIS) Chairman Indika De Zoysa, whose organisation is the apex body of the ICT industry in the country, noted that much of the technology and even infrastructure required to reach these targets was already available in Sri Lanka, with implementation remaining key. 

Furthermore, De Zoysa addressed the policy proposals of the Government as well as the current dynamics of the digital industry.

Following are excerpts: 

What is your opinion on the digital economy proposals introduced in  Budget 2025?

Digitalisation has been positioned as a cornerstone of the Budget, with the focus being on digitalisation across all sectors. At its core, the Government has prioritised the implementation of a digital ID, commonly referred to as the Unique Identifier (UID). This will serve as the foundation for digital identification for citizens. 

Additionally, a significant amount has been allocated under the Ministry of Digital Economy to develop basic digital infrastructure, known as Digital Public Infrastructure (DPI). This includes initiatives such as building a Government cloud, enhancing and expanding the Government network, and advancing towards a cashless society. 

For instance, Government payment systems (GovPay) and QR code implementations are being rolled out. The Budget also emphasises Small and Medium-sized Enterprise (SME) digitalisation, aiming to elevate SMEs to the next level. 

A substantial amount of funding has been allocated under the Digital Economy Ministry and other relevant ministries for these initiatives. The fundamentals have been addressed and there is a clear focus and roadmap for execution.

Will it be possible to fully implement the SLUDI this year?

A complete implementation may not be feasible this year, but the groundwork can be laid for 2026, as a significant amount of data collection is required. While the technology is available, the physical process of gathering data will take time, as we need to cover approximately 14-15 million people, excluding children. 

This entire process might take one to two years. At the policy level, all necessary steps, legislation, regulations, and frameworks must be finalised. The technology is ready and can be utilised for implementation.

What can Sri Lanka achieve this year in terms of digitalising public services? Is the necessary infrastructure already in place or does it require further focus this year?

Some infrastructure already exists, but parts of it need replacement or improvement. For example, GovPay, the digital payment system for Government institutions, has already got around 16-18 institutes on board and is expanding. 

This allows citizens to make payments online without waiting in queues. These services will scale up and more Government services will transition online. For instance, services such as revenue licence renewals will become more accessible digitally.

How much progress has been made in DPI over the past year and which critical areas should be developed in 2025?

The Government has established a cloud environment and data hosting framework. The focus is on building basic infrastructure, such as the Government cloud and Government network. Additionally, plans are underway to develop a national data exchange. The existing cloud infrastructure needs to be upgraded to the next level. 

A significant portion of the Government cloud is already operational and modern technology can enhance its speed and efficiency. With widespread coverage across the nation, the technology and policy frameworks will be finalised soon, paving the way for implementation.

The national data exchange will be built as an additional layer, followed by verticals like healthcare, education, and Government services, with applications developed on top of this infrastructure. While a solid foundation exists, further improvements and scaling are necessary to achieve a technological leap.

How would you describe the Government’s focus on providing digital literacy, particularly to the youth? Was the budgetary focus sufficient?

Digital literacy has become a necessity and the Government is addressing this through three key components. The first is building capacity and increasing digital literacy among school children. Plans are in place for digital education across all three sectors – schools, vocational training centres, and universities. 

The second component focuses on building capacity among Government officials. As Government services become digitised, officials must be adequately trained, given the presence of over 1.4 million Government employees. 

The third component targets citizens. Without digital literacy, the population cannot fully utilise these services. These three segments form the core of the Government’s strategy.

Several digital policies have been introduced recently, including those by the previous administration and the National People’s Power (NPP) Government. Which of these policies do the proposals reflect?

The National Digital Economy Strategy 2030, drafted in collaboration with the industry, Government, and World Bank, serves as a key policy document. The digital policy published by the NPP Government aligns closely with this strategy. We have formed a task group with the Ministry of Digital Economy to refine the National Digital Economy Strategy 2030. 

Although it was formalised two years ago, it is designed as a living document to adapt to technological advancements. While we work on these refinements, we will also execute programmes in partnership with the Government.

What was the revenue of Sri Lanka’s IT industry in 2024 and what are the projections for 2025?

Estimating revenue remains a challenge due to limited data availability. Even the Government system lacks comprehensive data. We are exploring ways to conduct surveys and establish a baseline. Some of the available data is outdated. Expert estimates suggest that the industry is approaching $ 2 billion, while the official figure stands at $ 1.2 billion. 

From a digital economy perspective, the last official data from 2020 indicated a revenue of $ 3.7 billion. We believe this has grown to approximately $ 4.5-5 billion, driven by the e-commerce surge during Covid-19.

Which key areas are demonstrating the growth needed in order to support these targets?

E-commerce and fintech are experiencing growth. SME digitisation is a priority with a pressing need for growth in the digital Government sector to ensure widespread adoption. Moreover, export growth is imperative. The ongoing efforts will have a direct and indirect impact on the contribution of the digital economy.

What is the status of Artificial Intelligence (AI) adoption in the country and what is the expected trajectory?

AI adoption is gaining momentum. The AI task group has completed public consultations and the strategy document is nearing completion. This will provide clear direction on AI applications in sectors like education, healthcare, and agriculture. 

Regulations and policies will be established to facilitate data-driven decision-making, even in areas such as production planning.

With regard to cybersecurity concerns, are there sufficient mechanisms in place from a policy perspective?

Yes, the necessary policies are in place. The Data Protection Authority (DPA) is being created, with the power to enforce legal and implementation measures. The Personal Data Protection Act, which is already in place, will become fully operational in 2025, strengthening cybersecurity efforts.  

This will strengthen cybersecurity efforts and will be supported by the implementation of a Cybersecurity Authority, ensuring security is integrated into system designs. Policies will be updated to address evolving technological challenges.

What challenges will 2025 bring and what targets can be achieved this year in terms of implementation?

The primary challenge is ensuring stability and encouraging a positive environment. While plans and strategies are in place, effective implementation is crucial. This year will likely serve as the baseline year, with significant progress expected from 2026 onwards.

It is unlikely that all targets will be met within the year, as infrastructure development takes time. However, we aim to finalise processes and policies and begin rolling out initiatives this year, with major implementation expected in 2026.

What initiatives will FITIS undertake in 2025 to improve digital literacy and digitisation?

FITIS will play a significant role in capacity-building initiatives. Through our education chapter, we will contribute to enhancing digital literacy. We will also collaborate with the Government on specific programmes in 2025 and beyond. 

For instance, our digital exhibition, Infotel, scheduled to be held in Kandy this year, will showcase new technologies and their potential to transform literacy. We also organise the Digital Excellence Awards to measure the digital maturity of organisations and identify areas for improvement. 

Additionally, our DigiGo programme supports SME digitalisation. These initiatives will continue to support the Government and the country in achieving their goals, aligning with our role as an industry association.

As of 2024, SME digitisation is still at a pilot stage. We have directly and indirectly engaged with approximately 10,000 SMEs and we plan to conduct a survey to measure the impact and achievements of these SMEs. Moreover, we are developing a digital maturity model to assess their progress.

FITIS will continue its current activities, particularly in capacity building and SME digitalisation. We will collaborate with the Government to accelerate and fast-track these targets.