Public sector Salaries expenditure down while Pension payments up
At a time when Sri Lanka is looking to restructure its state-owned enterprises (SOE), which continue to be a massive burden to the economy, the government needs to step up efforts to tackle the bloated public sector, for which active steps are yet to be taken.
The latest update by Publicfinance.lk showed that according to the 2023 budget estimates, 15 percent of the total recurrent expenditure of the government will be spent on salaries of government employees.
Of the total state salaries, the defense sector claims 48 percent. The tri-forces take up 32 percent of the total payroll expenditure and 16 percent goes for other defense services.
According to World Bank (WB) data, the size of Sri Lanka’s armed forces was at its highest between 2017 and 2019 with 317,000 personnel. This was several fold more than the number of personnel recruited during the civil war which ended in 2009.
In January, the Ministry of Defense announced it will slash its army to 135,000 personnel (by a third), and to 100,000 by 2030.
The expenditure on salaries and wages of public servants including Provincial Councils declined by 4.0 percent to Rs. 303.3 billionin the first four months of 2023, compared to Rs. 316.1 billion in the same period of 2022, finance ministry data shows.
This drop was due to the increased number of retirees at the end of 2022, the suspension of recruitment to public sector together with the revision of the compulsory retirement age to 60 years.
However, the expenditure on pensions increased by 6.3 percent to Rs. 105.9 billion in the first four months of 2023, compared to Rs. 99.7 billion in the same period of 2022.
The Government incurred Rs. 264.39 billion on household subsidies including Samurdhi payments, elder’s allowance, assistance to differently-abled soldiers, food packages for pregnant mothers, and fertilizer subsidy and school uniforms and text books in the first four months of 2023.
Expenditure on Samurdhi cash grant provided to low-income families for the first four month of year 2023 has increased to Rs. 55,593 million from Rs. 20,679 million in correspondence period of 2022 due to the Government decision to provide allowances.