Parliament began debating a bill on Wednesday to wind up the Shrama Vasana Fund, the state body set up to provide welfare and financial support to private-sector and semi-government employees.
Deputy Minister of Labour Mahinda Jayasinghe told the House that the fund “had acted away from its intended objectives during the past period,” NewsFirst reported.
Why it is being closed
The dissolution was taken up by Parliament’s Committee on Public Finance last week, at the same sitting the committee examined the liquor security-sticker system. Chaired by MP Harsha de Silva, the committee considered the winding up of the fund under the Finance Act No. 38 of 1971.
Members were told that the fund — established in 1998 and amended in 2019 — had been identified for dissolution because of its lack of relevance to the present context, its poor performance and the underutilisation of its assets.
Officials told the committee that the fund’s essential services would continue to be delivered through the Ministry of Labour once it closes. Closing it is expected to cut the cost of maintaining a separate institutional structure and allow public resources to be used more efficiently.
Context
The fund’s closure is part of a wider review of state bodies that no longer justify standing institutional overheads. The same committee sitting produced the finding, reported on August 13, that digital security stamps on alcoholic beverages had yet to lift tax revenue significantly.
NewsFirst’s report did not carry the outcome of Wednesday’s debate, opposition arguments, or details of what will happen to the fund’s existing beneficiaries and assets. The Ministry of Labour has separately been moving on employment regulation this year, including new factory safety rules and a social security agreement with India covering EPF contributions.
