Government Eyes Closure and Merger of Institutions in State Sector Reform

COLOMBO (News 1st); President Anura Kumara Dissanayake has signaled a significant restructuring of Sri Lanka's public sector, revealing plans to close and merge a number of state institutions while pursuing reforms aimed at attracting more skilled professionals into government service.

Addressing the centenary annual general meeting of the Government Surveyors' Association in Battaramulla, the President said the Government took the difficult decision to increase basic salaries despite challenging economic conditions, arguing that a stronger and more attractive public service is essential for the country's future.

He noted that the Government's first Budget in 2025 introduced basic salary increases to be implemented in three stages, spanning 2025, 2026 and 2027, with the objective of bringing qualified professionals into the state sector.

However, the President said a major imbalance currently exists within the public service.

According to him, many professional positions remain vacant while lower levels of the state sector have become heavily populated over the years, partly due to politically driven appointments. As a result, even relatively small policy decisions carry a substantial financial burden because of the overall size of the public service.

While reiterating that a strong public service remains essential, Dissanayake argued that the cost of delivering those services has become excessively high and must be addressed through structural reforms.

"The public service is essential. However, the expenditure required to provide those services is excessive. Therefore, we have decided to close some institutions and merge others. At present, discussions are underway regarding the closure of 34 institutions under the Ministry of Finance, and a committee has been appointed to oversee that process. Our focus must be on how we recruit professionals into the public service and how we transform the state sector into an attractive destination for skilled professionals," the president explained.