The national social protection mechanisms are struggling to keep pace, as the island continues to grapple with high poverty rates. Sri Lanka has legacy welfare programmes, and more recent ones, both of which has had questionable efficacy and has been plagued with allegations of misuse, corruption, politicisation and mismanagement.
Since 2022, Sri Lanka’s poverty line has been on a steep upward trend, standing at Rs. 13,777 in December 2022 and reaching Rs. 15,970 by January 2023, then rising to Rs. 17,014 in January 2024 and dropping slightly to Rs. 16,334 in January 2025. Data from March 2025, showed the poverty line standing at Rs. 16,302. According to the World Bank, the poverty rate in Sri Lanka was 24.5% (at $ 3.65 per person per day) in 2024. Although poverty declined marginally during the year, it remained nearly double what it was in 2019 (11.3%).
Sri Lanka’s household incomes are also well below pre-crisis levels, while vulnerability has also increased, with a third of Sri Lankans living in poverty or one shock away from falling back into it. While poverty is expected to decline to 22.7% in 2025 and remain around 20% in the medium term, under current projections, the economic crisis is expected to have reversed a decade of poverty reduction. Another compounding issue has been concerns that the current poverty line does not adequately represent the minimum acceptable standard of living for the poor, and as such, does not provide a reliable and realistic metric to assess poverty in today’s socio-economic context. If that is the reality, Sri Lanka’s poverty crisis may well be larger than we envisage.
The World Bank has noted that a more pro-poor economic recovery, in which economic growth translates into higher rates of growth in household income among less well-off households, could help bring poverty rates back to their pre-crisis levels before 2030. Before the crisis, a key focus area was identified and, aimed to accelerate job creation and poverty reduction. Traditionally, a stronger safety net is highlighted as a priority to protect the poor and vulnerable, pointing to the need of ensuring that social protection programmes are better targeted to further reduce poverty. Looking at Sri Lanka’s legacy welfare systems and their many shortcomings, there has been a need to build better targeting and delivery systems. Strengthened graduation programmes can go a long way towards supporting the poor. The success of Sri Lanka’s existing social protection mechanism remains questionable given the evidence of its poverty rates.
Some experts have observed that recent reforms (under previous administrations), such as the introduction of the ‘Aswesuma’ programme and the Welfare Benefits Information System (WBIS), represent steps towards addressing these challenges. However, they have argued that sustained efforts are necessary to enhance the efficiency and reach of social protection systems to effectively alleviate poverty.
The incumbent Government is well aware of the situation, and has moved to introduce a new welfare programme, while holding on to ‘Aswesuma’ in the short term. The new programme, called ‘Praja Shakthi’ is said to have the objective of not merely to alleviate the symptoms of poverty but to eradicate it from its roots as well, ensuring that the benefits of economic growth are equitably distributed across all strata of society. While the new policy and mechanism is still being rolled out, its efficacy and success may only be visible several years down the road.
Some economists and welfare practitioners have commended the ‘Paja Shakthi’ for its shift in policy. One clear departure from the past is that ‘Praja Shakthi’ includes the inclusion of education and health components. Unlike previous poverty alleviation initiatives that often-overlooked education, ‘Praja Shakthi’ explicitly recognises its pivotal role, integrating it alongside health, transportation, food security, and marketing as core pillars of its strategy. Observers have however cautioned that there is need for more clarity about the programme, its components, and metrics to successfully roll out an effective service.
As such, the Government should move with consultation to fill the gaps in policy, build awareness, and ensure clarity so that the programme delivers what it promises. Sri Lankans deserve to have the promises made to them upheld, especially those who are struggling to get by.