TRENDS IN GOVERNMENT EXPENDITURE OVER

THE PERIOD OF 1995-2006

Assignment 1

Group members: Imesha kodithuwakku

Date: 26/04/09

Siadth Perera

Prashan Muthugala
Salient features of public expenditure on Education
The Sri Lankan education system has been celebrated in development policy circles
and the economic literature for its success in providing widespread access to
primary and secondary education and enabling the country to attain comparatively
high human development levels for a low
income economy. Up to the early 1990s, Sri Lanka enjoyed the highest basic social
development outcomes relative to per capita income among virtually all developing
countries. This achievement was the result of strategic public policy decisions, over
several successive generations, to invest resources in education, health and other
social services.

Source- Treasures of the education system in

SriLanka

• UPFA government under the leadership of her Excellency C.B

Kumaratunga(95-00,03-04)

The development of an educational system which will strongly respond

to the growing needs of the market driven economy was the major
focus during this era because there seemed to be a skills mismatch
between the educational attainments and labour market
requirements.Hence the educational system was redesigned and it was
made compulsory for the parents to enroll their children to a formal
school.Further four new universities namely
Sabaragamuwa,Rajarata,South Eastern,Open university were opened
to satisfy the requirements of higher education.

• UNP government under the leadership of Hon Mr R Wickramasinghe(02-04)

The policies implemented during this regime were mainly focused on

reducing regional disparities in respect of general education.Thus several
steps were taken to improve infrastructure facilities in rural and semi urban
areas under “Navodya Schools Programme”.Further the general educational
sector was hit with a serious blow by the tsunami in 2004 damaging a vast
number of schools.
 • UPFA government under the leadership of his Excellency Mr M R
Rajapakse(05-06)

Further policies were implemented to improve infrastructure facilities,hence

the Education Sector development framework programme(ESDFP) was
implemented to uplift the quality of education and to improve ICT
education.Further two universities were established namely Uva wellassa and
the University of visual and performing arts.Large amount of funds were
spent on restructuring the Tsunami affected schools.

Hence it can be seen that the expenditure on education has increased over
the years,but majority of the targets were not achieved because of poor
planning,poor allocation and of funds and corruption.

Source-Central bank annual

reports(1995-2006)

Salient features of public expenditure on Health

Health care is one of the most important needs of a citizen in any country.
Due to the fact that it is a public good and also due to the rapid increase in
aging population, it has a direct impact on the volume of services demanded
by the government.

Time to time government of Sri Lanka has come up with policies to increase
the life expectancy and improve quality of life.

When considering the time period from 1995-2006 the cost on health has
increased from 10,952 million rupees to 58,000 imposing a higher burden on
the government since it leads to expansionary fiscal policy measures.
( institute of health policy)
The Major policies undertaken in health expenditure sector &
objectives behind them

• In 1997 president Chandrika Kumaratunga appointed a presidential

task force with the aim of formulating health policy and to strategies to
address the health issues. Since war was affecting the country it
increased the demand for health service further. Therefore Under this
policy government mainly focused on disabled, victims of war &
conflict.

• Introduction of divisional directors of health services was done in 1992

with aim of decentralizing powers and providing a more efficient
service to the nation.

• National health policy has recognized community participation as an

important contribution for the improvement of health care. Therefore
establishment of village level health committees, districal committees,
use of mass media to highlight the contribution and appointment of
samurdhi animators took place after 1995.

• Establishment of MRI (medical research institute) in Colombo to deal

with clinical biochemistry, microbiology, vaccine production &
laboratory technology.

• Establishing the health system research program (HSR) at national

institute of health science (NIHS). This was done with the objective of
implementing, coordinating, monitoring & evaluating a program of
research on priority health problems, technical & financial assistance
etc.

• Introducing public mid wife (PHM) in order to help the poor society.

• Introduction of several health infrastructure development projects in

2002 by ministry of health, nutrition & welfare.

• Vaccination programs in schools free of charge.

 OUTCOMES OF POLICIES ON HEALTH WITH REGARD TO
TARGETTED ISSUES

• President task force has developed at least one hospital in each

district, developing 28 hospitals under allopathic system & 23 under
indigenous medicine system.
Government has also taken over 21 hospitals to provide better, free
health service to people. This is reflected in increase of expenditure
from 12,135 - 14,419 million rupees from 1997-1998(Institute Of
Health Policy)

• Improvement in schools health programs including vaccination

programs leading to preventing school children from various diseases
like polio, malaria, etc.

• There had been an overall improvement & government has been able
to Serve
citizens who can’t afford to satisfy their health needs at private
hospitals rising cost. This

has helped improving living standards of people & building a nation

with a healthy and

Productive employees, who will be able to improve the growth of

economy.

This was done by using expansionary fiscal policy which increased

budget deficit.

• In 2002 health expenditure by government was 1.6% of GDP (24,900

million rupees). This led to expansion of demand for private sector
services.( CB annual report 2002).
Also the shortage of experienced medical staff, secondary and tertiary
sectors being overcrowded shows the inefficiency of public sector even
if a higher budget is allocated every year.

(WHO regional office for south-East Asia)

 GOVERNMENT EXPENDITURE
400,000.00
350,000.00
300,000.00
Rs(Mill)

250,000.00
200,000.00
150,000.00
100,000.00
50,000.00
0.00
1 2 3 4 5 6 7 8 9 10 11 12

Years

EXPENDITURE FROM 1995-2006

160000
140000
120000
100000
Rs(Mill) 80000
60000
40000
20000
0
Education Health Defence Infrastructure
EXPENDITURE TYPE