Sri Lanka’s Finance Ministry has decided to close 34 state institutions, President Anura Kumara Dissanayake has said, as the government considers restructuring public sector organisations and addressing shortages of professional staff.
Dissanayake announced the decision at the annual general meeting of the Government Surveyors’ Association in Battaramulla, adding that a committee had been appointed to oversee the process. He said the government had also decided to merge certain state institutions, although he did not identify the organisations affected or provide a timetable for the closures.
The president linked the proposed changes to weaknesses in the public service, including difficulties retaining professionals and the concentration of political appointments in lower levels of the administrative system. He said Sri Lanka had numerous vacancies in its professional public service, while political appointments had filled positions at lower levels.
Dissanayake said the government believed a strong state administrative system was necessary to ensure that public funds reaching the Treasury were distributed to the wider population. The government, he said, remained firmly committed to maintaining an effective public sector capable of carrying out that responsibility.
He also distinguished between the country’s capacity to withstand domestic economic shocks and its ability to respond to external shocks. Sri Lanka had sufficient rupee liquidity to manage economic disruptions originating within the country, he said, but its economy was not strong enough to withstand external shocks.
The president’s remarks came as the government prepares changes to public sector remuneration, with salary increases and allowances expected to receive different levels of attention over the next two years.
Dissanayake said the government had decided to increase basic salaries despite the difficulties facing the public service. However, raising salaries in 2027 would require 110 billion rupees, prompting the government to place greater emphasis on allowances in the budget for that year.
He said allowances would receive substantially greater attention in 2028, when there would be no increase in basic salaries. The government would nevertheless consider essential allowances needed to retain employees in the public service, particularly professionals who might otherwise leave.
The president acknowledged that the public sector was failing to attract and retain sufficient personnel. Many people were leaving because public service employment was not attractive, he said, while the state lacked an effective system for retaining professionals.
The proposed institutional closures and mergers form part of the government’s response to these administrative problems. Dissanayake said the government had identified the need to close certain institutions and consolidate others, while the Finance Ministry had taken the decision to close 34 state institutions and appointed a committee to oversee the process.
The president did not provide further details about the committee’s membership, the criteria used to select the institutions or the financial savings expected from the proposed restructuring.
