Financing for equity in primary and secondary education
1. Education resources to subnational governments
2. Education resources to schools
3. Education resources to students and families
4. Social policies and family support programmes
Introduction
In Sri Lanka, education is administered through a five-tier system comprising the central Ministry of Education, provincial ministries and departments, zonal and divisional education offices, and individual schools, which are classified as either national or provincial. National schools are managed directly by the Ministry of Education, while provincial schools are overseen by provincial authorities.
Funding is provided from the national education budget, allocated by the Ministry of Education and the National Treasury to the nine provincial councils. These funds cover recurrent expenses, including salaries, utilities, quality improvement measures, and maintenance, as well as capital investments such as infrastructure development. Schools are classified into five categories, more congenial, congenial, not difficult, difficult, and very difficult, based on criteria including the availability of basic facilities, equipment, sanitary conditions, building adequacy, administrative spaces, teacher numbers and qualifications, and proximity to transportation networks. Schools classified as “difficult” or “very difficult” receive higher allocations to address disparities.
Introduced in 2000, the Education Quality Input (EQI) scheme directs a fixed percentage of recurrent and capital budgets directly to schools to finance materials, equipment, instruments, and services that enhance teaching and learning. Fund allocation follows a Norm Based Unit Cost Resource Allocation Mechanism, which considers expert-defined quality input norms, student population sizes, economies and diseconomies of scale, available grade levels, and capital improvement requirements. This approach aims to ensure smaller and often rural schools receive proportionally higher per-student capital funding.
As of 2025, Sri Lanka is implementing reforms to better address disparities in education financing. Article 8.3 of the National Education Policy Framework (2023–2033) mandates per-student funding for primary and secondary government schools, with rates adjusted based on existing facilities, school performance, and other criteria. A higher per-student rate is specified for institutions serving disadvantaged or vulnerable children and communities, with a three-year transition period from the existing input-based funding system.
1. Education resources to subnational governments
Provincial Funding Allocations
The Ministry of Education and the National Treasury allocate funds from the national education budget to the nine provincial councils, covering recurrent expenses—including salaries, utilities, and maintenance—and capital investments such as school infrastructure. Allocation decisions are made by the ministry based on several criteria. Provinces with larger student populations receive proportionally higher shares of funding, while those with inadequate infrastructure or urgent repair needs are prioritised for capital investment. Socioeconomic factors are also taken into account, with additional support directed to provinces with higher poverty rates to address resource disparities.
2. Education resources to schools
Education Quality Inputs Programme
The Education Quality Inputs (EQI) programme, established in 2000, is a formula-based funding system designed to distribute resources equitably across schools. Funds are allocated under four expenditure categories: consumable goods, capital goods, repair and maintenance of capital goods, and external consultancy services. Each school maintains a separate EQI account, with allocated funds credited at the start of the year. Schools are responsible for identifying and purchasing EQI items, following guidelines issued by the Central Ministry of Education.
Schools are first grouped into seven categories based on the grades they offer, from primary-only to those providing both primary and senior secondary education. They are further divided into eight groups according to student population to adjust for school size. A weighting system allocates funding across primary, junior secondary, and senior secondary grades. The formula ensures that smaller schools receive higher per-student funding, reflecting their limited capacity to raise independent resources.
Province Specific Development Grant and Criteria Based Grant
Additional funding sources include the Province Specific Development Grant (PSDG) and the Criteria Based Grant (CBG). The PSDG enables provincial councils to address region-specific priorities, including educational infrastructure and access to quality education, through tailored projects aligned with the National Development Policy Framework. Fund allocation is monitored by the Finance Commission, while the Ministry of Local Government and Provincial Councils oversees implementation to ensure coherence with national and provincial objectives. The CBG provides provinces with a lump sum for socio-economic development, with education being one of the potential recipients.
3. Education resources to students and families
The Grade 5 Scholarship Programme is a national initiative managed by the Department of Examinations since 1944, aimed at supporting academically talented students from low-income families. Selection is based on the competitive Grade 5 Scholarship Examination, which assesses language, mathematics, and general knowledge. High-performing students may receive a monthly stipend for educational expenses and may qualify for placement in better-resourced national schools. The programme seeks to reduce educational inequalities by ensuring access to quality education and improved learning facilities for disadvantaged students. Over time, the programme has increasingly emphasised financial assistance, particularly for students from rural and underprivileged areas, rather than prioritising admission to elite secondary schools.
Shoes for Children in Sri Lanka
The Shoes for Children in Sri Lanka programme, operating since 2015, provides school shoes to underprivileged children, especially those in rural and economically disadvantaged areas. Many students walk long distances to school and are unable to afford footwear. The programme aims to improve school attendance, safety, and overall well-being by supplying durable and comfortable shoes. It targets children from low-income families, particularly in rural and plantation communities, and is funded through a combination of government initiatives, private donors, and NGOs. Implementation is coordinated through schools, local education offices, and social service organisations, which identify children in need.
4. Social policies and family support programmes
Samurdhi (Prosperity) Programme
The Samurdhi (Prosperity) Programme, launched in 1995, is a comprehensive poverty alleviation initiative in Sri Lanka, designed to reduce poverty through public participation in development. Its core components include cash transfers, savings and credit schemes through Samurdhi banks, and social development initiatives. Under the programme’s Sipdora Scholarship, students from low-income families are eligible for financial assistance. Since 2013, the programme was managed by the Ministry of Rural Development, Social Security and Community Empowerment through the Department of Samurdhi Development.
Aswesuma, introduced in 2023, replaced Samurdhi with a more targeted system to ensure that cash transfers reach the most deserving individuals. The programme uses 22 indicators across six dimensions—education, health, economic status, housing conditions, family demographics, and assets—to determine eligibility. Beneficiaries receive monthly cash transfers for periods ranging from six months to three years, depending on the severity of their poverty status.
5. School meal programmes
Free School Meal Programme
The Free School Meal Programme, launched in March 2024, aims to address nutritional deficiencies among children, enhance daily school attendance, and promote healthy eating habits. The initiative also seeks to improve academic performance and instil lifelong healthy lifestyle choices. The programme operates under the guidance of the government’s Manual on School Nutrition Programme, issued by the Health and Nutrition Branch of the Ministry of Education. Funding is provided by the government and allocated directly to provincial councils, which coordinate with local suppliers responsible for delivering the meals. Additional support comes from the World Food Programme (WFP) and the United States Department of Agriculture (USDA). Oversight and implementation are managed by the Ministry of Education.
This profile was reviewed by Dr Nisha Arunatilake, Institute of Policy Studies of Sri Lanka.
