In a significant move, the Cabinet has approved a proposed salary increase ranging from 24 percent to 50 percent for public sector employees, through the Budget 2025. This decision reflects both a recognition of long-standing salary disparities and the Government’s commitment to economic stability. The proposal, which emerged from the recommendations of an expert committee chaired by former Secretary to the President Udaya Seneviratne, is both timely and necessary, addressing the concerns of a workforce that has long grappled with stagnant wages amidst rising living costs.
The committee headed by Udaya Seneviratne was tasked with a comprehensive review of salary structures across the public sector, which had not seen significant adjustments in years. The committee’s mandate was not merely to propose a salary hike but to address systemic salary anomalies that have long plagued the public sector. These anomalies, resulting from years of ad-hoc adjustments and policy changes, have created significant disparities within the workforce, where employees with similar qualifications and experience often receive vastly different compensation.
After extensive consultations with public officers, trade unions, and other stakeholders, the committee submitted its interim report to the Cabinet. This report highlighted the need for a structured and equitable salary revision that considers qualifications, experience, and the roles and responsibilities of public servants. The committee’s recommendations were aimed at not only increasing salaries but also at standardising them across different grades and categories, thereby reducing the long-standing salary disparities.
The approved salary increase is structured to benefit all grades of public sector employees. Those in the lower grades will see a minimum increase of 24 percent, which will raise the basic salary of the lowest-paid public servants to approximately Rs. 55,000. For higher grades, the increase could be as high as 50 percent, depending on qualifications, experience, and current roles. A monthly cost-of-living allowance of Rs. 25,000 will be introduced for all public servants, a much-needed relief considering the country’s current inflationary pressures.
The committee’s recommendations go beyond just salary increments. They propose a comprehensive restructuring of the public sector employment framework, aligning recruitment and promotions with the Sri Lanka Qualifications Framework (SLQF) and the National Vocational Qualification (NVQ) system. This move is designed to ensure that salaries are not only fair but also reflective of the skills and expertise required for different roles, The committee has recommended the introduction of a new medical insurance scheme for all Government employees and pensioners, enhancing the overall benefits package for public servants.
The decision to increase public sector salaries comes at a critical moment. Over the past decade, Government employees have faced significant financial strain due to stagnant wages, inflation, and rising living costs. These challenges have been exacerbated by the economic crisis that hit Sri Lanka, leaving many public servants struggling to make ends meet. The cost-of-living has soared, while salaries have remained relatively unchanged, leading to a decline in the real income of public sector workers.
Salary anomalies have further compounded the problem. Over the years, the lack of a standardised salary structure has resulted in significant disparities, with some employees earning far less than their counterparts in similar positions.
While the salary increase is undoubtedly a positive development for public sector employees, it must be viewed within the broader context of Sri Lanka’s economic recovery. The country is currently implementing a series of economic reforms under the guidance of the International Monetary Fund (IMF), aimed at stabilising the economy, reducing debt, and fostering sustainable growth. The salary increases, therefore, need to be managed carefully to ensure that they do not undermine these efforts.
To accommodate the salary hikes within the constraints of the IMF agreement, the Government must adhere to stringent fiscal targets. This includes enhancing revenue collection, curtailing unnecessary expenditure, and implementing public sector reforms. The proposed salary hikes will also need to be balanced against the broader economic plan, which includes reducing the public sector workforce and improving efficiency through digitalisation and performance-based incentives.
With the Presidential election just a month away, the timing of this salary increase proposal is politically significant. It serves as a reminder to all candidates that any promises made must be economically viable and aligned with the ongoing recovery process. President Ranil Wickremesinghe and his administration deserve commendation for steering the economy towards stability, which has made such proposals feasible. However, it is crucial that the next administration must be committed to continuing the reforms initiated under the current leadership. Therefore, all Presidential candidates should be mindful of the delicate balance between meeting the needs of public servants and ensuring fiscal discipline.
As the election approaches, it is necessary that all Presidential candidates recognise the importance of continuing on this path. The future of Sri Lanka’s economy depends on responsible leadership that can navigate the complexities of economic recovery while ensuring that the needs of the public sector are met sustainably. The salary increase is a positive development, but it must be implemented with care to ensure that it contributes to, rather than detracts from, the country’s economic stability.
