Excessive Salary Increases: Will the people and the country win or lose?

Fiscal performance is an important determinant not only of macroeconomic fundamentals but also the overall trajectory of the economy. Increased government involvement in the economy, over several decades, has led to a sharp rise in government expenditure. At the same time, revenue collection has been weak. As a result, for much of the post-Independence period, Sri Lanka has experienced a structural budget deficit.