Sri Lanka froze the hiring of civil servants and introduced new taxes and higher electricity prices in measures aimed at addressing its current economic crisis. 

One of the preconditions to securing the $2.9 billion bailout from IMF is for the island to achieve debt sustainability. As Sri Lanka negotiates with its creditors which include India and China, measures were introduced by the government to increase state revenue. Almost a doubling of personal income and corporate taxes while electricity prices rose 65 percent which comes after a 75% tariff increase in August.

The IMF had earlier asked Sri Lanka to cut down on its 1.5 million strong government jobs, raise taxed and sell off state-owned enterprises. In December, a record 20,000 civil servants retired which was eight times more than previous years, according to the public administration ministry.

This happened after Sri Lankan president Ranil Wickremesinghe decided to reduce the retirement age from 65 to 60.

Sri Lanka has also banned non-essential capital expenditure amid new measures owing to which officials who authorise investments over 500 million rupees without clearing them with the treasury first will be personally accountable for the same.

However, despite the austerity measures Sri Lanka's military budget revealed last November vastly outstrips spending in other sectors. In the 2023 budget the Ranil Wickremesinghe government allocated $1.45 billion  (539 billion Sri Lankan rupees) as the cumulative budget for the Ministry of Defense and the Ministry of Public Security. The Ministry of Defense received $1.108 billion while the Ministry of Public Security received $350 million. Spending still increased despite the Ministry of Defence declaring a general amnesty for the Tri-Forces absentees, enabling legal discharge from the respective services. The period of general amnesty is in force from 15 November 2022 until 31 December 2022. Sri Lanka's military still remains one of the largest in the world. 

Defence allocation is massive compared to the amounts allocated for health — $870 million (322 billion rupees) — and for education — $620 million (322 billion rupees).

 Fourteen out of 21 of Sri Lanka’s Army divisions are stationed in the north. In Mullaitivu District, an estimated 60,000 personnel remain. Given the district’s sparse population, this amounts to almost one soldier for every two civilians in the region, making it one of the world’s most heavily militarized areas. And across the Tamil provinces, tens of thousands of acres of land are occupied by the military while thousands of Tamils remain displaced.

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