Attached
It is difficult to im agine a situation w here there is no governm ent. As the leader
in an economy as well as the authority in charge of the State, governm ent can
contribute m uch tow ards economic developm ent. If the governm ent is not
moving along a proper path of developm ent, the results may be different. The
gradually expanding public sector is an exam ple of such an occasion. Derailed
governm ent can som etim es be corrected if citizens are familiar w ith the critical
limit of the governm ent in economic activity. The size of the governm ent is
increasing in som e developed and developing countries. This underm ines
the role of the State in economic developm ent. In the late 1970s Sri Lanka
opened its economy and privatised m any public ventures. This paper reviews
the trends of the financial aspect and the size of the public sector in Sri Lanka.
The paper com pares governm ent related variables such as expenditure, tax
revenue, public debt and the num ber of public sector em ployees in Sri Lanka
over time and w ith that of other countries in a given period of time. The paper
concludes that in Sri Lanka, in spite of massive privatisation, the public sector
is expanding. The critical variables, budget deficit and foreign debt are also
increasing. However, the dow nw ard turning point has just originated. The
citizens in a country ought to be m ade fam iliar w ith the fact that governm ent
is to provide goods w ith indivisible benefits and that governm ent and the
m arket are com plem entary and not substitutes. They should not alw ays ask
the governm ent for more jobs. By introducing new taxes the governm ent may
increase income to narrow dow n the budget deficit.
