• A proposal for Sri Lanka’s next budget

As Sri Lanka prepares for its next budget, the national discussion will naturally focus on growth, investment, jobs, revenue, productivity, and the cost of living. 

All of these matter. But there is another economic question hiding inside thousands of Sri Lankan homes: who cares while we work? For many families, this is not simply a private matter. It can determine whether someone is able to work at all.

A mother may be ready to return to work after having a child, but safe childcare may consume a large share of her salary. A daughter may want to continue her career, but an ageing parent may suddenly need daily support. A skilled employee may reduce working hours because there is nobody reliable at home. We usually see these as family decisions, but the economic consequences go much further.

When someone leaves work because care is unavailable, a worker is lost, skills go unused, and household income falls. An employer may lose an experienced employee and face new recruitment and training costs. Consumption may also decline. 

In simple terms, when care stops, work can stop too. That is why care should be seen not only as a social responsibility, but also as an economic issue.

Sri Lanka may therefore need to look at childcare and eldercare differently. They are part of the invisible infrastructure that allows people to remain economically active. We build roads because people need to reach work and digital systems because people need to connect to work. In the same way, reliable care may be what makes work possible in the first place.

A care-to-work credit

One practical idea for the next budget could be a care-to-work credit. Where the cost of approved childcare or eldercare is the main reason preventing a person from entering, returning to, or remaining in employment, the State could meet part of that cost. This should not become another general cash allowance. It should be a targeted, employment-linked intervention designed to remove a specific barrier to work.

Eligibility could depend on whether care responsibilities are directly affecting a person’s ability to work. The care provider should be registered or approved, while the Government contribution could be capped and linked to household income. Lower-income working families could receive greater support, with the contribution gradually declining as income rises. This would keep the programme targeted and fiscally manageable.

The obvious question is: who pays? A practical model could involve three contributors: the Government, the family, and, where possible, the employer. The Government would provide the care-to-work credit through a specific budget allocation, the family would contribute according to its financial capacity, and employers could voluntarily support employees through welfare or staff retention arrangements.

Not every employer can establish a childcare centre, particularly a small or medium-sized business. But an employer may be able to contribute towards an employee’s approved care cost. If childcare costs Rs. 30,000 per month, for example, the State could meet one share, the family another, and the employer, where willing, part of the balance. The exact proportions should be determined through proper costing and piloting.

The Government contribution should also not normally be paid to the family as unrestricted cash. A better approach would be a digital care credit linked directly to an approved provider. The employee would apply through a simple digital or assisted process, employment and household information would be verified, and an approved provider selected. The Government-funded portion could then be transferred directly to that provider.

The principle is simple: support the care so the person can continue the work.

Consider a young mother who could earn Rs. 80,000 per month but remains at home because safe childcare costs Rs. 35,000. Returning to work may not appear worthwhile. If a care-to-work credit reduces her personal care cost to a manageable level, she can return to employment. Her employer retains a skilled worker and the childcare centre gains additional business.

The childcare centre may then employ another assistant. That worker earns a salary, while the mother also earns an income. Both households spend on food, transport, education, and other needs, while the care centre buys supplies and pays utilities. The money begins to move and the economic effect spreads beyond the original care payment.

This is where the velocity of money becomes relevant. A Government contribution reaches a care provider, the provider pays wages, those workers spend locally, and the employee who returned to work also earns and spends. Businesses receive additional demand and some of that activity generates taxable income and consumption. A relatively small intervention can therefore activate a wider chain of economic activity.

Of course, the same rupee is not counted repeatedly as new GDP simply because it changes hands. GDP reflects new value added through production. But when a person returns to productive employment, a care provider expands, another worker gains a job, and household consumption increases, additional economic value can be created. That value can contribute to GDP.

The care-to-work credit could therefore work through several channels at once. It could bring inactive or under-employed people back into productive work, expand childcare and eldercare services, create new care jobs, and encourage informal care providers to become trained and registered. Employers may also benefit by retaining skilled employees and reducing recruitment and training costs.

This is why the key question should not simply be, ‘How much did the Government spend?’ It should be, ‘How much additional economic activity did that spending make possible?’ 

If one public contribution helps one person return to work, another person gain employment, and a care enterprise expand, its economic return is broader than the original payment. This is the return on care.

Broader applications

The idea should also extend beyond childcare. 

Sri Lanka is ageing and many working adults are increasingly caught between employment, children, and elderly parents. A daughter may be balancing a career, children, and an ageing mother, while a son may repeatedly leave work to care for his father. This growing pressure can create a care squeeze, eventually forcing someone to reduce work or leave employment.

For that reason, the programme should be gender-neutral. Fathers caring for children and sons caring for elderly parents can face the same employment barriers as mothers and daughters. At the same time, women may benefit significantly because they often carry a greater share of unpaid care responsibilities. Care should be recognised as a family and labour market issue, not automatically a woman’s responsibility.

Sri Lanka should also see the supply side of care as an opportunity. A woman informally looking after neighbourhood children could be trained and registered. A young person could build a career in eldercare, a village group could establish a care cooperative, and existing childcare or home care services could expand. One person receives care and remains employed, while another provides care and gains employment.

Budget 2027 does not need to begin with a large nationwide programme. A carefully designed pilot in selected districts or among selected groups would be more sensible. The Government could cap beneficiaries and contributions, test different family and employer co-payment models, and evaluate the results before expanding the programme.

Success should be measured by outcomes: how many people returned to work, how many remained in employment, how many new care jobs were created, how many providers became registered, and how much additional income was generated. We should also measure employer retention and the Government cost for each worker successfully returned to or retained in employment. These indicators would tell us far more than the amount spent.

The process itself should remain simple. People balancing employment and care are already short of one valuable resource: time. Clear eligibility, one application, approved providers, digital payments, periodic verification, and strong child and elder protection standards should form the core of the system.

The real return on care

Perhaps one of the smartest investments in the next budget will not be recognised by the size of the allocation. Its value may appear in a mother returning to her profession, a daughter who does not have to resign to care for her father, a caregiver earning a dignified income, or an employer retaining a valuable worker.

Sometimes economic growth begins with a surprisingly human question: can I go to work knowing that the person I love is safe? If the answer is no, work may stop. If the answer becomes yes, a larger economic chain can begin. 

Care enables work. Work creates income. Income circulates. Businesses grow. Value is created. And that value contributes to GDP. That may be the real return on care.

(The writer is an independent researcher)

(The views and opinions expressed in this article are those of the writer and do not necessarily reflect the official position of this publication)