Annual Report 2008 - Ministry of Finance and Planning

2. Fiscal Developments - 2008
67
Box 2..2
Public Service Salaries and Pension Payments
By the end of 2008, the total number of government employees
was around 950,000 excluding semi-government sectors,
standing at around 13 percent of the labour force of the
country. This represents the highest population/government
employee ratio in South Asia where the main intension is
to provide an efficient and effective public service. A major
share of total government employees represents defence,
education and health sectors covering both central and
provincial governments.
The expenditure on salaries and wages which is the highest
single expenditure item in the central government budget,
represented 5.4 percent of GDP while accounting for 32
percent of the total recurrent expenditure in 2008. Further,
salaries and wages have absorbed 36 percent of the total
revenue in 2008.
paid for staff and other ranks respectively. Expenditure on
account of COLA was around Rs.33,000 million in 2008. It
was further revised in the Budget 2009, with public servants
in all categories receiving a monthly COLA of Rs. 4,500 per
month from January 2009.
Personal Emoluments Growth
(on minimum salary)
Rs. per month
Category 2005 2008 Growth (%)
Basic Salary 8,140 11,730 69
COLA - 3,500
Total 8,140 15,230 87
Source: Department of National Budget
The hike of salaries and wages reflected Rs. 13,324 million
for Defence, Rs. 3,653 million for Police and Civil Security,
Rs. 3,516 million for Central government and Rs. 4,425
million as the government provision for provincial council
salaries and wages. The salary bill of the education sector
which covers around 225,000 teachers amounted to Rs.
74,382 million and is second only to defence, public order
and safety salaries. However, the salaries & wages of the
institutions such as Universities are not included in this
total salary bill since these institutions receive transfers as
the Government contribution from the national budget.
The wage bill of the Central Government including defence,
public order and civil security was Rs. 165,287 million in
2008. The Provincial Council salaries amounted to Rs.
79,878 million out of which Rs. 73,791 million was provided
from the national budget while the rest was from the own
revenue earned by the Provincial Council.
The cost of salaries and wages has reached Rs. 239,078
million in 2008, an increase of Rs. 24,918 million over 2007.
This was the combined result of the increase in recruitments
mainly in the armed forces and the enhancement of Cost of
Living Allowance (COLA) to all employees by Rs.375 from
1st January and by a further Rs.375 from 1st July to the staff
categories and Rs.625 each to lower grades. Accordingly,
two different monthly COLA i.e. Rs.2,850 and Rs.3,500, were
Ministry of Finance and Planning Sri Lanka
Annual Report 2008