ECONOMYNEXT – Sri Lanka will review the role of 115 state entities which cost 140 billion rupees a year to maintain, Cabinet Spokesman Nalinda Jayatissa said.

Sri Lanka now has 86 departments, 25 district secretariats, and 339 divisional secretariats; 340 enterprises owned by the government and 115 non-commercial state statutory institutions other than police.

“There are boards, commissions, foundations, universities and statutory entities,” Jayatissa said.

“In the 2024 budget, 140 billion rupees was allocated for these entities.”

The 115 non-commercial state statutory institutions come under the supervision of the Department of National Budget and 51 institutions under the Department of Public Enterprises.

The purpose of these establishments has decreased over time, or the entities have lost its timeliness, and they lack or have very little power to initiate programs, and sometimes overlap with other establishments, Jayatissa said.

There was a timely requirement to conduct a review of these entities, he said, and the Cabinet of Ministers had approved a proposal to appoint an official committee headed by the Prime Minister’s secretary to conduct such a review and submit a report with recommendations.

Any savings made following the review will reduce the tax burden of the state on the people, in a spending based fiscal consolidation move.

Sri Lanka has been operating a ‘revenue based fiscal consolidation’ strategy under the IMF from around 2015 which eventually led to sovereign default after money was printed to target potential output. Technical assistance to target potential output was also given by the IMF.