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.

Sri Lanka’s Jathika Hela Urumaya (JHU), a major Sinhala nationalist party in President Sirisena’s ruling coalition, said the resolution passed by the Northern Provincial Council, calling for an international probe and prosecutions of those responsible for genocide, is a “huge blow” to the country’s unity, harmony and reconciliation, reported the Daily Mirror.

“The Tamil people were deprived of their right to participate in elections by the LTTE. But they were able to cast their vote at the January 8 presidential electionfor the first time after 1982 even though some groups such as the Tamil Diaspora conspired with the former government to carry out a boycott of the election by the Tamils in the North and East. Certain separatist groups are using this resolution to create divisions between the Sinhalese and the Tamils,” he said.

US Secretary of State John Kerry called for Sri Lanka to open up “greater accountability” and to preserve human rights, in remarks before his meeting with the Foreign Minister of Sri Lanka Mangala Samaraweera in Washington on Thursday.

Addressing reporters before the meeting, Mr Kerry said the change of government in Sri Lanka was a “vote to move Sri Lanka in a new direction, to open up greater accountability and possibility for the preservation of human rights, for democracy, for fighting corruption and putting together a government that will speak for and to the people.”

Mr Kerry further added,

“We’re going to talk today about President Sirisena’s thoughts about how to move Sri Lanka away from 30 years of war with the Tamils to a country that is inclusive and prosperous and peaceful”.

The Buddhist nationalist Bodu Bala Sena, threatened to destroy a mosque in Kuragala, in order to stop “these infidel Muslims” from running riot.

Speaking to media on Thursday, the general secretary of the BBS, Galagodaaththe Gnanasara said the organisation would invade Kuragala and dismantle the mosque “brick by brick”, claiming a Buddhist monastery existed at the site since before 200 BC.

The monk also said there was a high probability of the northern and eastern provinces being merged, resulting in the division of the country, with the support of India’s RAW and the West.

The spokesperson of the Tamil National Alliance, MP Suresh Premachandran urged India and the US to support the release of the OISL report and the implementation of its recommendations, while criticising the 100 day reform programme of President Maithripala Sirisena, for not addressing Tamil issues.

Speaking at a press conference at the Jaffna Press Club, the MP for Jaffna also welcomed the genocide resolution passed by the Northern Provincial Council on Tuesday, adding that genocide of the Tamil people continues today in various forms.

Mr Premachandran called on the international community, “be it India or the United States,” to cooperate and ensure the release of the OISL report and to push for the implementation of its recommendations.

“There is nothing about Tamil issues in the [President’s] 100 day programme,” he pointed out. “Tamil people should be resettled, political prisoners should be released.” Mr Premachandran said that Tamils expected the support of India, the US and other countries when demanding action on these issues.

Elaborating on the importance of the NPC’s genocide resolution, Mr Premachandran said “genocide is not simply killing a section of people. It is also rendering those people unable to live on that land.”