1. Overall Education Financing Mechanisms

2. Policies and Programmes to Provide Resources to Schools

3. Education Policies and Programmes to Provide Resources to Sudents and Families

4. Social Policies and Programmes to Provide Resources to Students and their Families


  1. Overall Education Financing Mechanisms

Sri Lanka has a policy of free primary, secondary and tertiary education in state and state-assisted institutions. The education of students in the age of 5 – 14 years is compulsory.   

The government provides school textbooks and uniforms free of charge and subsidizes school transport. Students do not pay PTA, matriculation or assessment fees. At the secondary level, the government also offers other welfare benefits, such as subsidized transportation and health services, to help students from disadvantaged families. Early childhood care and development (ECCD) are private and fee-levying and mostly provided by non-government agencies, religious organizations, INGOs and private individual or companies.  

The Ministry of Education directly administers education for national schools (353 schools1, 3.5% of the total number of schools in the country in 2017) while provincial councils oversee provincial schools (9,841 schools, 96.5%). There were 4.1 million students in 10 162 government schools in 2017 overall. The budget for 2021 is 102 670 000 000  

In 1987, the Finance Commission (FC) was established to facilitate the process of resource transferring to the provinces. The Commission introduced a formula for the apportionment of funds under the Province Specific Development Grant (PSDG) for infrastructure development projects2 and the Criteria Based Grant (CBG), which are to finance capital expenses to schools. A specific amount is provided from the consolidated fund for each sector to undertake development activities.  CBG is provided as a bulk amount to meet the capital needs of the provinces.  

Four categories include 

  1. income (Mean per capita income) and poverty (Poverty head count index and Unemployment rate) - PSDG weight 40%; 

  1. health (Neo-natal Mortality Rate and Low weight births)– PSDG weight 15%,  

  1. education (i.e. Student enrolment and Learning achievements at grades 4,5,9,O/L and A/L exams) – PSDG weight 15%; and  

  1. infrastructure facilities (Number of houses without electricity and Length of C, D roads) – PSDG weight 30%.  

In the case of the CBG, weights were assigned based on population 35%, per capita income 

20%, and Poverty Head Count Index 20% and unemployment rate 25%. In 2017, the provincial education sector received LKR 4432 million (US$ 25 million) for PSDG, accounting for 18% of the total operation budget. The total operational budget was LKR 24,134 million or US$137 million in 2017.  

At the provincial level the recurrent budget is financed by the consolidated fund called a Block Grant mainly for salaries.   

The National Human Resources Development Council, a responsible body for tertiary education, proposed a 23 percent increase in spending on education to 464 billion rupees in 2019, up from the 2018 budget allocation of 377 billion rupees, and a further 16 percent increase to 539 billion rupees in 2020. The NHRDC's proposals include formulating a road map to increase access to higher education among females. 


  1. Policies and Programmes to Provide Resources to Schools

Schools receive public funds from:   

b) Criteria Based Grant (CBG) and the Province Specific Development Grant (PSDG) 

d) Government funds received from other government institutions 

e) Funds for School Improvements, Education Quality Inputs (EQI) and Higher Order 


Funds for School Improvements, Education Quality Inputs (EQI), Higher Order Process - Part of the recurrent budget and the capital budget are given to schools directly under different programmes. One main avenue in which schools receive funds is through the Education Quality Inputs (EQI) programme. These are provided to schools according to a formula based on the student population and the grade coverage, with some adjustments for economies of scale. The zones calculate per student amounts of funds for each child in each type and size of school in the zone and based on these schools receive funds according to the student numbers. 

The Education Sector Development Framework and Programme (ESDFP) (2013-2017) included a theme of ‘increasing equitable access to primary and secondary’ estimated that special education needs 1% of the total operational budget (LKR 24,134 million or US$137 million) for the theme in 2017. There are 26 special schools accommodating 2,496 students in 2017.   

The Training and Development Plan 2017-2018 allocated Rs$145,000 (of the total of Rs$2.9 million) for Social equity: Peripheral schools, inclusive education, social cohesion and other. From January to April, 2019, a budget to finance special education for students with disabilities amounted LKR 2,093 million (US,$12 million).  


  1. Education Policies and Programmes to Provide Resources to Students and Families

In 2011, expenditure on bursaries and scholarships for students amounted to LKR 283 million (US$1.6 million), while the budget of the school meals program was LKR 2 631 million (US$15 million). These two types of student support expenditures represented about 3 percent of total education expenditures.  

The Ministry of Education implements 3 scholarship programs for school age children. The main program is the Grade 5 Scholarship program for talented students from economically disadvantaged background. The government provides the President’s Fund scholarship program for advanced level general education students dropping out of school due to financial situation, and the Sisu Diriya scholarship program under the Secondary Education Modernization Project of the Ministry, providing financial assistance for students affected by financial difficulties and receiving education in grades 10-13. Other government-funded programs include disability benefits, a special program for Education activities of street children, a foster parent program to assist children aged 6–13 years to pursue education; a sponsorship program for some families with children under 18 years of age; and the Senehasa Bank Account Programme for children who lost their parents in the tsunami. The government also provides school meals for poor children in grades 1-5 in selected rural primary and secondary schools and students in special education schools. 


  1. Social Policies and Programmes to Provide Resources to Students and their Families

Samurdhi, the largest welfare program in the country, allocated LKR 43 billion (US$243 million) in 2017 and has about 1.4 million families. This comprises a consumption cash transfer for poor households, provides Sipdora scholarships of SLRs 500 50 (US$283) per month for two years for school children with good educational attainment in very poor Samurdhi beneficiary families.  

One key proposal in Budget 2019 is to expand Samurdhi by 600,000 people. The selection process for the program is that many families that are not below the poverty line competing to receive Samurdhi funds. Budget 2019 will attempt to adjust this but given that Sri Lanka has a high percentage of near-poor families, inclusion remains attractive. 

Last modified:

Fri, 22/01/2021 - 16:30