In an era of growing economic inequality and shifting global priorities, the debate over the need for social safety nets has taken centre stage. In January the United States Senate voted in favour of a budget resolution which includes $ 2 trillion in cuts to federal spending, primarily targeting the 83 million dependent Medicaid and the 41.6 million dependent Supplemental Nutrition Assistance Programme (SNAP), both of which belong to the nation’s social safety net.
From the Trump administration’s proposed cuts to SNAP in the US to Sri Lanka’s own Aswesuma programme, the role of such initiatives in fostering economic stability and social equity are under scrutiny. Economist Umesh Moramudali, speaking to The Daily Morning Business, offered a compelling case for why social safety nets like Aswesuma are not just a moral imperative but key to actualising thoroughgoing economic outcomes.
Aswesuma, launched by the Government of Sri Lanka in December 2022, was meant to replace the earlier welfare benefits scheme Samurdhi. Its introduction was tied to a key condition in Sri Lanka’s loan agreement with the International Monetary Fund (IMF), which required the government to implement structural reforms, including the establishment of a more effective social safety net.
In contrast to Samurdhi, Aswesuma aims to provide targeted financial assistance to vulnerable and low-income groups, with a focus on reducing poverty, improving social welfare, and bolstering household resilience amid the country’s ongoing economic challenges. By prioritising transparency and efficiency, the programme conjecturally seeks to address the limitations of previous welfare systems while supporting those most affected by economic instability.
According to Moramudali, at its core, a social safety net is a reflection of a government’s duty to improve the living standards of its people. “Any government or country has an obligation to enhance the overall well-being of its citizens.”
For those living in dire poverty, struggling to afford food, shelter, and other essentials, programmes like Aswesuma provide a lifeline. Whether through cash transfers, food subsidies, or other benefits, these initiatives ensure that the most vulnerable are not left behind.
“It’s a basic human way of doing things,” Moramudali emphasises. “If people cannot afford the essentials of life, it is the government’s responsibility to step in and provide support.” In Sri Lanka, where economic crises have exacerbated poverty and inequality, Aswesuma serves as a critical mechanism to alleviate suffering and restore dignity to millions.
Beyond the moral argument, social safety nets like Aswesuma are also vital for economic growth. Moramudali highlights the importance of addressing poverty to build a healthy and educated labour force. “If a significant portion of the population is living in poverty, unable to access education or healthcare, the economy cannot function efficiently,” he says.
Aswesuma, by providing financial support to low-income families, ensures that children can attend school, parents can access healthcare, and households can meet their basic needs. This, in turn, creates a more productive workforce, Moramudali says. “When you uplift people from poverty, you’re not just helping them, you’re investing in the future of the economy,” Moramudali explains. “A healthy, educated population is essential for manufacturing, services, and overall economic productivity.”
Moreover, the benefits of social safety nets extend beyond the immediate recipients. By funding education and healthcare, programmes like Aswesuma create a ripple effect, improving outcomes for future generations. “When children from low-income families receive better education, they grow up to become more skilled and productive citizens,” Moramudali notes. “This boosts overall productivity and drives long-term economic growth.”
Moramudali then highlights several regional examples of how social safety nets have positively impacted local economies and driven growth. He begins by pointing to Brazil’s Bolsa Familia programme, a well-defined conditional cash transfer system that has successfully lifted many people out of poverty. The program ties cash transfers to specific conditions, such as ensuring children attend school and receive necessary healthcare, including vaccinations. Moramudali explains that this approach not only alleviates poverty but also promotes education and health, contributing to long-term human capital development. Moramudali describes it as "one of the most successful cash-based safety programmes.”
He also mentions Tunisia, where a multidimensional poverty indicator is used to identify those most in need of support, ensuring that assistance is targeted effectively. In South Africa, he notes a programme specifically focused on children, while in Chile, another initiative has helped many people overcome poverty. These examples, he emphasises, are not without flaws, but they have largely achieved their goals of reducing poverty, fostering upward social mobility, and improving educational outcomes.
In the South Asian context, Moramudali praises India’s digitised welfare schemes for their use of technology to efficiently deliver benefits across a large population. He also discusses Pakistan’s Benazir Income Support Programme, which has undergone numerous improvements over time. He highlights the programme’s adaptability, stating, “One of the good things about that programme is that it keeps improving and fixing its errors, which is how any social safety net programme should be.”
While acknowledging that none of these systems are perfect, Moramudali underscores their overall success in reducing poverty, enhancing human capital, and driving economic growth. He concludes by emphasising the importance of continuous improvement and adaptability in social safety net programmes to ensure they effectively meet the needs of vulnerable populations.
A study conducted by the Institute of Policy Studies (IPS) revealed that 40% of food-insecure households are excluded from receiving benefits under the Aswesuma welfare programme. This highlights significant systemic flaws in the current asset-based targeting approach used to identify beneficiaries.
Moramudali explained that Aswesuma was introduced to address three major issues present in the previous social safety net programme, and that despite these advancements, exclusion errors persist. The problems of the previous system included high inclusion and exclusion errors, administrative inefficiencies, and a fragmented social protection system. He noted that exclusion errors were even more pronounced under Samurdhi, with a larger proportion of deserving households being left out.
Aswesuma, however, has streamlined some of these issues. For instance, the new system simplifies the process of receiving benefits by directly transferring funds into beneficiaries' bank accounts, eliminating the need for cumbersome administrative procedures like standing in long queues or filling out multiple forms.
Another key improvement under Aswesuma is the consolidation of various welfare programmes under the Welfare Benefits Board. Previously, programmes like the elderly allowance, disability allowance, and chronic kidney disease allowance were managed by separate institutions, leading to inefficiencies. Aswesuma aims to create a unified database to better coordinate and deliver social protection.
Moramudali suggested several ways to address the issues that persist within Aswesuma, first being expanding the criteria used to assess eligibility. He said that In addition to income, factors such as household expenses, disaster readiness, and other vulnerability indicators could be incorporated to better identify those in need. “It is important to refine the data collection process by updating questionnaires to gather more comprehensive information during the next round of surveys.”
He further highlighted the need to re-evaluate the Multi-Dimensional Deprivation Index (MDI), which is used to determine eligibility. This index assigns weights to various factors, such as income and housing conditions, to calculate a household’s deprivation score. He suggested adjusting the weightage given to these variables to ensure a more accurate representation of household needs.
Additionally, he recommended integrating data from other institutions, such as the electricity and water boards, to gain insights into household consumption patterns, which could serve as additional indicators of economic vulnerability.
During the 2025 Budget, President Dissanayake unveiled the largest-ever allocation for Sri Lanka’s social welfare programme, with a sum of Rs. 232.5 billion earmarked for Aswesuma.
Moramudali raised several concerns regarding the government’s budget allocations for Aswesuma for the year, and alignment with IMF requirements. He noted that while the current budget allocates 0.6% of GDP for social protection, as mandated by the IMF, there are uncertainties about whether the allocated funds will suffice if additional families are added to the beneficiary list.
He explained, “if the second round of enumerations is completed, there could be an additional 200,000-300,000 people, or even more, added to the recipient list during the year. This doesn’t seem to be accounted for in the current budget estimates.” However, he suggested that supplementary estimates might be presented to Parliament to address this shortfall, though the exact number of new beneficiaries remains unclear at this stage.
He further emphasised the importance of improving the Welfare Benefit Integrated System (WBIS), the database underpinning Aswesuma. He highlighted the need for better data collection and regular updates, drawing parallels with systems in countries like Brazil, where families are required to update their information periodically.
He acknowledged the challenges of conducting frequent surveys but proposed alternative methods, such as allowing individuals to update their own data or leveraging regional offices for data collection. “Every two or three years, there should be a new round of data collection,” he said. He also suggested that the government should adapt to changing economic conditions, such as inflation, and adjust the amounts disbursed accordingly.
Additionally, Moramudali pointed to India’s use of technology as a model for Sri Lanka, particularly the integration of a digital ID system. “The digital ID project should be linked to the integrated welfare system,” he said, explaining that this would help streamline eligibility verification and address issues like duplication or fraud. “A digital ID would act as a digital footprint, making the process more efficient and transparent,” he added.
As Sri Lanka navigates the turbulent waters of economic reform, Aswesuma stands as both a beacon of hope and a work in progress. It embodies the delicate balance between fiscal responsibility and moral obligation, striving to uplift the most vulnerable while laying the groundwork for a more equitable future. Yet, as the IPS study reveals, its imperfections remind us that even the most well-intentioned systems require constant refinement and vigilance.
The true measure of Aswesuma’s success will not be found in its ability to meet IMF mandates or streamline administrative processes, but in its capacity to restore dignity, foster resilience, and ignite a ripple effect of opportunity across generations. As Umesh Moramudali aptly notes, the journey toward an effective safety net is one of continuous adaptation, innovation, and, above all, a commitment to the people it serves. Aswesuma, flawed yet vital, is a step on that path, a reminder that even in times of austerity, the greatest investment a nation can make is in its people.