Time to bury the “6% of GDP for Education” slogan and manage with 2%

RUPEES 704 billion is allocated for education in the 2026 Budget for Sri Lanka. This amount is the second highest allocation in the Budget and 2% of the projected GDP. This allocation is obviously nowhere near the much-cited goal of 6% GDP for education. What we have is an allocation which, like other allocations for education before, merely bolsters an education system that has been steadily losing its lead in access and quality decades ago. This Budget does not provide money to address burning issues like the unavailability of facilities for studying in the science stream for students in two thirds of the senior secondary schools in the country and the need to bring a fossilised examination system up to international standards, for example.

- By Dr. Sujata Gamage

Sri Lanka’s financial circumstances are such that it is impossible for this (or any) Government to increase the education allocation to 6% or even to 3% of GDP because Sri Lanka must stay within the limit of 13% of GDP for primary expenditure at least until 2028, if the country is to stay solvent. Any further increases from 2% would mean taking money away from other functions of Governance, social development and economic growth that are also important. The prospect of having to stay within 13% of GDP limit in the next few years means that 2% of GDP for education will be our reality for the next few years.

How did we get here and where do we go from here?

Low tax revenue intakes over the years

The Human Rights Watch hit the nail on the head when they added the tag line “How Low Taxes Drove Sri Lanka’s Economic Crisis and Squandered its Education Lead” to their recent report on Sri Lanka. They correctly identify underfunding of education as a Government tax revenue issue.

The story that Sri Lanka spends less than Haiti in education spending made the headlines some time back. Sri Lanka is indeed in the league of Haiti and other countries in terms of our education spending, but the headlines missed the important fact that Sri Lanka was also in the league of 10 bottom countries in Government revenue.

According to World bank and IMF data sources, the list of ten countries with lowest Government revenues along with their revenues as a percent of GDP on an average for the 2013-2022 period are Sudan (8.1%), Nigeria (8.2%), Bangladesh (8.6%), Haiti (10.4%), Guatemala (11.4%), Madagascar (11.8%), Yemen, Rep. (11.9%), Uganda (12.2%), Sri Lanka (12.3%) and Benin (13.0%). Not surprisingly, all except Guatemala and Madagascar spent less than 2.2% of GDP on education.

™13% of GDP limit to primary expenditure, imposed by debt repayment requirements