Business
The Political Economy of Fiscal Policies and Regulations to Promote Healthy Diets in Sri Lanka
Better Policies for Better Diets:
IPS Policy Insights
Non-communicable diseases (NCDs) have posed a critical health challenge for Sri Lanka for several decades. Estimated to account for 83 per cent of all deaths in Sri Lanka today, NCDs have serious health and economic consequences for both individuals and the country.1 In 2000 and 2010, the deaths that occurred due to NCDs were estimated as 74 and 76 per cent of the total deaths respectively.2 Unhealthy dietary patterns are one of the main behavioural causes for escalating NCD incidences.3 While 72.5 per cent of the Sri Lankan population eat less than five servings of fruit and/or vegetables on average per day4 only 26.9 per cent of the males and 28.0 per cent of the females consume five or more servings of fruits and/or vegetables per day.5 Further, 26.5 per cent of school children aged 13-17 years reported that they consumed a carbonated soft drink at least once per day.6 This shows how unhealthy dietary patterns are followed in Sri Lanka every day.
Political Economy and NCDs
Fiscal interventions are crucial to correct market failures, create incentives to reduce dietary risk factors for NCDs, and generate government revenue.7 Fiscal policies and regulations are implemented within complex country-specific systems. They are influenced by several contextual factors such as social norms and acceptances, stakeholders, their interests and influences, resource implications, equity and human rights, and feasibility. These factors are collectively recognised as the political economy. A country’s political economy greatly influences policy development, implementation, and realisation. A proper understanding of the political economy can help formulate better policies to meet the NCD challenge and create a healthy food environment.
Sri Lanka has introduced various measures including fiscal policies and regulations to promote healthy dietary patterns. The main objective of this policy brief is to highlight how the political economy of the food environment in the country influences the development of policies on healthy diets. The following findings are based on a political economy analysis conducted by the Institute of Policy Studies of Sri Lanka (IPS) as a part of the study on ‘Fiscal Policies and Regulations to Promote Healthy Diets in Sri Lanka’. The study examines the following aspects:
Policy framing – recognition of the main policy issue (underlying assumptions, perceptions, and concepts);
Policy contents – recognition of key policy elements; and Policy development – actors, stakeholders, and their interests.
The findings and recommendations are based on a review of policies introduced from the year 2000 onwards.
Key Findings
Policy Framing
Commendably NCDs, nutrition, and the food environment are recognised as important policy issues and framed well in the policy documents prepared by the health sector, mainly by the Ministry of Health.
Policy Contents
Healthy food consumption, production of healthy foods, social marketing and health promotion campaigns, nutrition labelling, nutrition education and retail sales of healthy food are the areas covered relatively well in the policy documents reviewed. However, many of the policy documents do not devote adequate attention to some crucial aspects such as funding sources, governance, gender sensitivity, and stakeholder identification. For example, the National Health Strategic Master Plan 2016-2025 Preventive Services Programme – Food Safety states, “The government of Sri Lanka will take over the responsibility in terms of finances and resource allocation to improve the food safety” as an assumption.8 But it does not either explain or present the financial sources and mechanisms to be used for this purpose. Likewise, in most policy documents, there is no explicit commitment to adopt fiscal measures to achieve the targets specified in those respective policies.
Policy Development
The Ministry of Health plays a central role in developing policies to reduce NCDs, promote healthy diets, and establish a safer food environment in Sri Lanka. Apart from the Ministry of Health, the Ministry of Agriculture has also demonstrated its interest in nutrition and the food environment. Production of healthy foods, marketing and trading, and nutrition education are some of the key areas covered in the policy documents of the agriculture sector. Other than these two ministries, other public sectors have not indicated any noticeable interest in NCDs, nutrition or the food environment.
Additionally, international development partners such as the World Health Organization (WHO), United Nations Children Fund (UNICEF), United Nations Population Fund (UNFPA), World Food Programme (WFP), and the World Bank (WB) are important stakeholders playing a supportive role in upgrading the nutrition status and food environment and addressing NCDs-related issues.
Recommendations
Continue to focus on policy framing and cover crucial policy elements:
The recognition and attention given to NCDs, nutrition and the food environment are progressive steps that need continuation. This is particularly important given the current NCD burden in Sri Lanka and the increasing trend of NCD-related morbidities and mortalities. However, the review of the policy documents revealed the lack of comprehensive coverage of important policy elements where some of the crucial aspects like governance structures, funding sources, and gender sensitivity are not adequately addressed.
It is essential to comprehensively confer due recognition to all the crucial aspects to implement the policies effectively and to achieve desired outcomes. For example, identifying governance structures is important for the effective implementation of policies. It also indicates the country’s commitment and responsiveness in addressing the issues identified in the policies. Likewise, it is necessary to identify funding sources to implement the proposed actions. No matter how well developed a policy is, it will not achieve its intended impact if the resources to implement the policy are not available.
Proactively seek the active
participation of all stakeholders
in policy development:
The efforts of the health sector (i.e., Ministry of Health) to develop policies on NCDs, nutrition and the food environment are commendable. Yet, the lack of involvement and interest by other sectors is a huge deterrent to achieving the expected outcomes of policies aimed at promoting healthy diets in Sri Lanka. Currently, these issues are regarded as “health issues” and other sectors/ministries either do not adequately recognise or completely ignore these concerns when they formulate policies for their respective sectors. The food environment, nutrition and NCDs are complex and interconnected issues.
Thus, policies that intend to address these issues must take a more holistic approach actively involving all the parties concerned. Further, the involvement of the highest level of the government such as the National Nutrition Council chaired by the President is recommended to lead and coordinate these processes, thereby assuring the highest level of political will and commitment.
This policy insight was prepared by IPS researcher Sunimalee Madurawala (sunimalee@ips.lk) based on findings from a study on ‘Fiscal Policies and Regulations to Promote Healthy Diets in Sri Lanka’ funded by the International Development Research Centre (IDRC), Canada. For more policy insights from IPS, visit: https://www.ips.lk/publications/policy-insights/.
Business
Sri Lanka’s economy: A slow healing journey in 2026
The latest Purchasing Managers’ Index (PMI) from the Central Bank suggests Sri Lanka’s economy is beginning to find its feet after a severe crisis, revealing tentative signs of hope in factories and business activity. It indicates the deepest economic pain may be over. With prices rising more slowly, families and companies are getting some much-needed relief.
The Island spoke to an independent analyst for an outside perspective. Elaborating on the report, he struck a cautious note: “Yes, the PMI sounds favourable. But no one should think the hard times are completely behind us. The road to recovery is long and full of potholes.”
“While we can hope for slow, steady improvement in coming months, major problems remain,” he continued. “The country’s massive debt is a heavy burden. Staying on track with the IMF programme requires sticking to tough reforms, which won’t be easy. Global economic uncertainty also affects our exports and even other forms of external support.”
“In short, the next phase won’t be a quick boom. It will be a time for careful repair. These small improvements are like young seedlings – they need constant care, sound policy, and continued external support to grow strong. Our task is to turn this shaky stability into a solid foundation for lasting, inclusive growth. The economy is out of emergency care, but full recovery will be a long and patient journey,” he concluded.
When asked if the current political landscape would aid recovery, he pointed to the present stability as a key advantage. “With political stability in place, the path for necessary reforms and recovery should be more navigable now than ever in the past,” he said.
By Sanath Nanayakkare
Business
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Parallel business launches were also conducted at branch level, with branch staff joining the head office proceedings via live stream. The day’s programme commenced with blessings observed from the four major religious faiths, symbolising unity and goodwill for the year ahead
Heralding the dawn of the New Year, SLIC brought together all 142 branches in a cohesive celebration, uniting as one family to light the traditional oil lamp. During the celebrations, the theme for SLICGL for 2026 ‘Leading the market, strengthening every step’ was officially unveiled
Celebrating 64 years of service and expertise, SLIC continues to stand as Sri Lanka’s most respected and trusted name in insurance. Over the decades, the organisation has remained at the forefront of the sector, sustaining industry‑wide growth and equity even through testing times.
The year 2025 brought many meaningful and positive achievements for SLICGL, yet it concluded with significant challenges as the nation faced the aftermath of the devastating Cyclone Ditwah. Rising to the occasion, SLICGL honoured claims and delivered timely relief, offering protection and reassurance to communities impacted by the catastrophe.
SLICGL proudly reflects on a year of remarkable achievements in 2025. The organisation was ranked
Sri Lanka’s highest-rated insurance brand as the only A+ Fitch rated insurer in the country and became the first and only insurer to surpass Rs. 30 billion in Gross Written Premium. SLICGL secured Carbon Neutral Certification, highlighting a commitment to sustainability. SLICL was also recognised as the Most Valuable General Insurance Brand by Brand Finance.
The lifting of the vehicle import ban in January 2025 helped to revitalize the automotive sector and also reaffirmed SLICGL’s role as the nation’s most trusted insurer. Stepping in to protect new vehicle owners, SLICGL strengthened its portfolio, supported national growth, and supported families and businesses to move forward with confidence.
During 2025, SLICGL continued its partnership with the Ministry of Education on the Suraksha Insurance Scheme, a national initiative aimed at securing the health and wellbeing 4.5 million schoolchildren throughout the country. The partnership provides students regardless of background, access to essential insurance coverage, safeguarding health, supporting families, and strengthening the nation’s future.
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Business
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The Milk Industries of Lanka Company (MILCO) has recorded the highest profit and sales revenue in its history, driven by strong performance under the flagship Highlands brand, Agriculture Minister Lal Kantha said.
Addressing a Performance Incentive Awards Ceremony held at the MILCO Head Office in Narahenpita on December 31, the Minister said the achievement marked a decisive turnaround for the state-owned dairy enterprise, which had earlier been prepared for divestment.
“When we assumed office, MILCO was being readied for sale. Today, we have been able to rescue it and transform it into a profitable institution,” Minister Lal Kantha said. “By October 2025, the company had generated profits amounting to Rs. 1,490 million, the highest profit ever recorded in MILCO’s history.”
He noted that 2025 has also become the year with the highest sales revenue since the company’s establishment, reflecting improved operational efficiency, renewed consumer confidence and stronger market penetration under the Highlands brand.
The Minister said the government intends to ensure that the gains from the company’s financial recovery are shared across the value chain. “A portion of the profits will be distributed as incentives among dairy farmers,” he said, adding that plans are also in place to provide free life insurance coverage to 15,000 dairy farmers in 2026.
The incentive awards ceremony was organised to recognise employees who played a key role in achieving record sales targets and historic profitability, with senior management highlighting improvements in production planning, supply chain management and farmer engagement.
Minister Lal Kantha paid tribute to the dedication of the MILCO workforce, stating that the turnaround was the result of collective effort.
“This achievement belongs to everyone who worked tirelessly to restore confidence in this institution. I extend my sincere appreciation to all those who contributed to this success,” he said.
MILCO’s performance in 2025 is being viewed as a benchmark for the revival of state-owned enterprises, particularly within Sri Lanka’s agri-based industrial sector.
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