Government slashes salaries and perks of state institution heads
In the wake of declining state revenue, rising debt and high public spending, the government is now controlling costs by pruning high salaries of heads of state institutions and relocating the surplus staff in accordance with manpower requirements.
The new administration has introduced a new salary structure for chairpersons of state institutions after revelations that some high officials had been paid exorbitant salaries during the previous regime.
Some chairmen of state entities are reported to have been drawing monthly salaries plus allowances ranging from Rs.1.5 to Rs.2.5 million.
Under these circumstances, Secretary to the President Dr. P.B. Jayasundera has issued a circular limiting the salary and allowances of heads of state institutions to Rs. 100,000.
They will be entitled to only one vehicle and a fuel allowance of 150 litres per month or monthly allowance and other facilities specified by the Treasury whichever is less, the circular indicated.
The monthly allowance of a director of a state institution has been reduced to Rs. 25,000 regardless of the number of board meetings held within a month. Board members are not entitled to use official vehicles other than for the purpose of attending board meetings.
All chairmen and board members have been directed to assess the suitability of their respective CEOs and CFOs and other members of the senior management and take appropriate management decisions in consultation with relevant authorities and where necessary after having referred to the President’s office.
Measures will be taken to streamline the workflow avoiding duplication of work, operation of multiple divisions units and project affairs, a senior official of the Public Administration Ministry said.
Measures will be taken to reduce and consolidate the staff strength by redeploying excess staff where there is a shortage of staff after conducting a needs assessment so that all employees would be given an opportunity to contribute productively while discharging their duties and responsibilities.
The move comes while the government is heading into a serious fiscal issue due to reduced government revenue as a result of tax revisions announced by the new administration, an economic expert said.
Attention has been drawn on spending money of advertising, marketing and promotional budgets of state institutions, the Presidential Secretariat circular divulged.
All heads of state institutions have been directed to curtail expenditure on fuel, electricity communication, travel, use of vehicles, and less priority procurements such as furniture, equipment, building and office facilities.
All spending programmes of state entities should be reassessed to identify priorities in the context of the government’s development initiative, the circular stipulated.