Sri Lanka public sector ‘unbearable burden’: Finance Minister

ECONOMYNEXT – Sri Lanka’s public sector which has become an “unbearable burden” on the economy, Finance Minister Basil Rajapaksa said Saturday after bringing a budget proposal to increase the retirement age.

Explaining his maiden budget unveiled in parliament Friday, Rajapaksa said there will be no salary increases for the 1.42-million-strong state sector employees as the government struggled to pay their salaries.

Increasing the retirement age however will nix any chance of trimming the public sector by attrition.

The minister said new recruitment will be carried out only to fill vacancies created by retirees.

However, with the increase of the mandatory retirement age of the public sector by five years to 65, no public servant has to retire till November 2026.

“For at least one more year, there is absolutely no way we can spend public money on government sector employees,” Rajapaksa said.

Sri Lanka’s public sector is regulated expanded unemployed graduates, educated at tax payer funded state universities, who cannot find jobs in productive sectors.

President Gotabaya Rajapaksa after slashing valued added taxes in December 2019 to build a ‘production economy’ hired 53,000 graduates in to the public sector and set up a Multi-Purpose Development Task Force to hire another 100,000 workers who had passed Grade 8 to ‘reduce poverty’.

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In 2020, 86 percent of all taxes collected from the people went to pay for salaries and pensions.

In his budget speech Finance Minister Rajapaksa had allocated an addition 30,000 million rupees to address the salary anomalies of teachers who recently went on strike to press their demands to get what was due to them.

Rajapaksa said increasing the retirement age was a concession to the public sector.

“The public sector has expanded so rapidly that they have become an unbearable (uhu-lun-ner barry) burden. There is no need to give them lozenges. We must honestly accept, that this public sector is a burden (bu-ruck) to the country ,” he said.

“To give benefits to the public sector we have to take money from the public.”

He said there was one public servant for 113 citizens at the time of Sri Lanka gaining
independence from Britain in 1948, but the civil service has expanded and the ratio was now 1 civil servant for 13 citizens.

In 2020 and 2021 Sri Lanka printed money to finance the deficit and also keep rates down and the country is now facing forex shortages, the rupee is under pressure and inflation is rising (COLOMBO, November 13, 2021)

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