The United States said it is focused on supporting “accountability and reconciliation” in Sri Lanka, following a visit from the Foreign Minister of Sri Lanka Mangala Samaraweera, who was in Washington on Thursday.

Sri Lanka's President Maithripala Sirisena has taken key responsibilities from the defence ministry.

The move means the number of institutions under the control of State Minister for Defence Ruwan Wijewardene have been drastically reduced.

Sri Lanka's revised budget could stoke inflation and further economic imbalances, warned rating agency Moody's Investors Service.

The 47 percent hike in public sector wages can boost consumption and growth but it would also boost inflation, a historic problem in Sri Lanka according to Moody's.

"Given that public sector employees make up 15 percent of the work force, the 47 percent increase in nominal wages will boost consumption, thus supporting growth," Moody's said.

Sri Lanka’s President Maithripala Sirisena said the resolution passed by the Northern Provincial Council, calling on the UN to investigate genocide committed by the government, was beyond the limitations of the body, NPC opposition leader Sinnathurai Thavarasa was quoted by Ceylon Today.

The president is reported to have said at a meeting with notorious paramilitary leader Douglas Devananda, that he was “dismayed” at the resolution.

"The president, accompanied by his adviser and Eastern Province Governor Austin Fernando during his meeting with the EPDP leader and his delegation, said the alleged war crimes could not be called as genocide and the NPC has rushed for the resolution, when the new government has just embarked on its reconciliation process," Mr Thavarasa said to Ceylon Today.

The Tamil National Alliance welcomed the genocide resolution passed by the Northern Provincial Council and urged it to “go further” and follow it up.

Speaking to Ceylon Today, TNA General Secretary Maavai Senathirajah said the alliance welcomes the resolution, which calls on the UN to investigate charges of genocide against Sri Lanka and prosecute those responsible, and urged the NPC to follow up on developments related to the resolution to “alert” the UN Human Rights Council.

“The war crimes were committed during the previous Rajapaksa regime,” said the MP, who is also the leader of the TNA’s main constituent party, ITAK.

“Therefore the resolution was passed urging the UN to investigate those who had committed war crimes. The NPC should go further and follow up on the developments with regard to the resolution in order to alert the UNHRC at the March session in Geneva,” he said.