Sri Lanka's public sector outweighs Asian peers​

Abstract

Sri Lanka’s public sector employment levels are highest among countries in South and Southeast Asia region. In 2023, 15% of the total 8 million workforce (1.16 million people) were employed in the public sector, including central government, subnational units, and the military. Notably, Defence and Public Security alone account for one-third of all government employees.

In comparison, countries in the same region with similar economic structures employ far fewer public workers. For instance, India employs 9%, Vietnam 8%, and Bangladesh only 5% of their workforce in the public sector.

This has resulted in high costs, despite the low wages paid to the public sector. In 2023, the Sri Lankan government spent LKR 940 billion—20% of its recurrent budget and 31% of its revenue—on public sector salaries. Over the past decade, an average of 23% of government spending has gone to salaries, leaving limited funds for vital areas like healthcare, education, and infrastructure.