Sri Lanka creates more state jobs, but costs mount

May 05, 2010 (LBO) – Sri Lanka’s expanding state has created more jobs in recent years but costs are mounting with 57.6 cents out of every tax rupee being taken home by workers as salaries and pensions last year, official data shows.

In 2009 Sri Lanka had increased state workers by a net 61,856, higher than the 55,118 in 2008, despite the country going through an economic slump and ordinary people finding it difficult to bear high taxes needed to pay for state upkeep.

Last year Sri Lanka’s budget deficit expanded to 9.8 percent of gross domestic product not counting grant funding.

Sri Lanka also has an oppressive income tax system where only people outside the state are charged income taxes. Even a pension fund of the lowest paid private sector worker is taxed while state employees get tax free unfunded pensions.

Economists have warned that expanding the state is unsustainable though it may give a temporary boost, with falling unemployment statistics or rising gross domestic product. Government output is largely measured by the wage bill in national income accounting.

Since 2004, in a campaign largely led by the Marxist Janatha Vimukthi