Sri Lanka has 1.1 million government workers and a total public sector workforce of 1.3 million persons, in a move that could add 33 billion rupees to the wage bill.

On January 05, the government said salaries of teachers and principals will be increased by between 1005 to 2,685 rupees with effect from July 2008 with an additional allowance of 645 rupees.

From December 2009, taxes on various imported foodstuffs which were raised from late 2008 as global prices collapsed, were cut.

The opposition presidential candidate Sarath Fonseka has promised a 10,000 rupee salary increment for state workers, which is estimated to cost 132 billion rupees a year.

State handouts announced in the run up to the polls have been dubbed 'Fonseka bonuses' by opposition spokesmen.

Sri Lanka's people have to pay large amounts of taxes to support a bloated state sector, which has also been freed from income taxes, in a bizarre apartheid-style move despite the island being a nominal democracy.

State workers and politicians are also given tax free and tax slashed cars, while ordinary citizens pay very high taxes in another apartheid-style move.