Rajapakse, who is also finance minister, unveiled new tax measures to reduce the 2010 deficit of 8.0 percent of GDP to 6.8 percent of GDP in 2011, the lowest in 19 years.
However, the budget will see a six percent rise in defence spending to 215 billion rupees (1.9 billion dollars) for 2011, about a fifth of the national budget, according to figures tabled in parliament.
The defence budget remains high to repay hefty installments on military hardware bought to fight the Tamil Tigers.
"Having ended the war, and with vital infrastructure in place, we are now in a better position to engage in an accelerated development process within the next six years," Rajapakse said last week.
Parliamentary officials said the main aim of the budget was to raise Sri Lanka's per capita income to 4,000 dollars by 2016 when Rajapakse's second term of office comes to an end.Rajapakse, who has a strong grip on power in Sri Lanka after overseeing the defeat of Tamil Tiger rebels in May last year, raised taxes on casinos, alcohol and international phone calls.