One remarkable feature of the last phase of the transfer of power in Sri Lanka was the emergence of a rudimentary welfare state. In retrospect this would seem the inevitable effect of the pressures of a democratic electorate under universal suffrage and a system of semi-responsible government. But in the years of the Great Depression of 1928–32 and the malaria epidemic of 1934, although attention was focussed as never before on the condition of the people, a contracting economy combined with a treasury under a British civil servant as financial secretary bent on the conventional exercise of balancing the budget by a rigorous policy of retrenchment seemed insurmountable obstacles to any initiatives in social welfare. With the Second World War, however, the economy was at last in a more buoyant state than at any time in the inter-war period. Money was now more readily available for expenditure on social welfare. The politicians of the day confronted greater pressure for increased expenditure on social welfare and had a more realistic understanding than the British officers of state of the political importance of responding generously to these demands than they—the politicians—themselves had done in the 1930s.
We need to begin this survey, however, with a look at the plantations, the bedrock of the island’s economy.1 The problem common to all the plantation industries in the early 1930s was how to cope with the Great Depression and its impact. The response to these problems was much the same in both the tea and the rubber industries, although the depression in the rubber market was far worse than that in tea.
In the tea industry, there was first of all an attempt to reduce costs by establishing more efficient and economically viable units by merging small and middle-sized plantations into larger ones, or absorbing them as units of a large complex of plantations (‘groups’, as they were called) under common management. The question, however, was essentially one of overproduction and this called for joint action by the major producers of tea in Asia. In 1933, an international restriction scheme for tea was successfully negotiated under which Sri Lanka, India and the then Dutch East Indies were each allocated export quotas based on a fixed percentage of the maximum quantity of tea exported in the period 1929–31. The Tea Control Ordinance of 1933, which gave effect to this agreement, introduced a system of export coupons which were allocated to individual tea producers. By permitting the sale of the coupons, the scheme was given a flexibility which guaranteed its survival and success. Partly as a result of these measures, but also because of the gradual recovery of the industrial countries from the Great Depression, tea prices began to recover by the mid-1930s. Although the prices fetched hardly matched those of 1922–30, the recovery was nevertheless substantial.
The same pattern was seen in the rubber industry too: first an attempt was made to reduce output and when it became evident that this was inadequate to ensure the survival of the industry, an international agreement was sought on the restriction of production. An International Rubber Agreement was negotiated between the main rubber-producing countries in 1934. Sri Lanka was an eager participant in this arrangement. A Rubber Control Ordinance was approved by the State Council under the terms of which the planting of new areas under rubber was prohibited. The effect on prices was entirely salutary and for the rest of the decade rubber prices rose moderately.
The coconut industry had been less influenced by external conditions than tea and rubber, although there was a pattern of troughs and peaks in prices and world demand in the period up to the Great Depression. There had been a steadily increasing world demand for coconut products, for the manufacture of soap and margarine, since the beginning of the twentieth century. But coconut—either in the form of copra or as an edible oil—was not only much less important than tea or rubber as a revenue earner, but also its price was determined by the international prices of fats and oil. Coconut products constituted just 9 per cent of the world resources of fats and oil. With the Depression the market for coconut products in the industrial countries was considerably reduced and prices declined sharply. Since the production of coconut was largely controlled by Sri Lankans (ranging from owners of large plantations to a motley group of smallholders), the near collapse of the industry gravely affected the economic well-being of the indigenous planting community. There was no resort to artificial restraints on production to improve prices and recovery of the industry was due entirely to improved demand for coconut products in the world market in the middle and late 1930s.
In general, the effects of the Great Depression were felt more severely in countries like Sri Lanka, producing primary commodities for export, than in industrial economies. The relevant statistics for Sri Lanka make dismal reading: the revenue from exports plunged from Rs 479 million in 1927 to Rs 189 million in 1932, reflecting the decline in prices of her main exports, while the price index fell from 169 in 1927 to 65 in 1932, even though there was a slight increase—from 97 to 102—in the volume of these exports. The terms of trade registered a sharp fall from 99 in 1927 to 61 in 1932, the drop being as much as 15 per cent per annum in the years 1929–32. The fall in the terms of trade contributed most to the decline in real incomes.2
Since the major part of the national income was derived from exports, the depression in the export trade spread to all sectors of the economy. Unemployment was the major problem. It is estimated that over 9,000 Sri Lankans and 84,000 Indians lost their jobs between 1929 and 1932. Over 1,00,000 immigrant plantation workers returned to their homes in India in the period 1930–33, the most significant large-scale emigration to India since the late nineteenth century. Unemployment in the plantations was not restricted to manual workers but affected managerial (least of all), technical and clerical staff as well, which was very largely Sri Lankan. Outside the plantations, about one-tenth of those employed in commercial firms belonging to the Employers’ Federation were retrenched in the aftermath of the Depression, while the number employed in the state sector fell from 69,287 in 1930 to 60,553 in 1933. Temporary workers were discontinued in all sectors of the economy. Minimum wages of plantation workers were reduced and there was a temporary levy on the salaries and wages of permanent employees in the state service.
The village economy and traditional agriculture did not escape unscathed. On the contrary the sharp fall in prices of primary products affected locally produced rice as well, and with it there was an inevitable deterioration in the living standards of the peasantry. Again, although the tea and rubber plantations did not rely to any appreciable degree on indigenous labour, they did provide opportunities for casual work for peasants living in their vicinity. With the Depression this source of seasonal employment was lost. As a consequence, the meagre resources of the village economy were subjected to even greater strain.
The large-scale emigration of unemployed plantation workers relieved the government of its responsibility over the gravest aspect of the unemployment problem—it was exported to India. Even so, unemployment and underemployment among the indigenous population was serious enough. The government’s response was lethargic and, as we shall see, riddled with contradictions. This was partly because finance was a matter in which the primary responsibility under the Donoughmore constitution lay with British officials who were more committed to the orthodoxies of laissez-faire economics than Sri Lankan ministers and more inclined than the latter to take a cold, hard look at proposals which involved the expenditure of large amounts of public funds in welfare measures. Retrenchment and curtailment, their standard remedies for the country’s economic malaise, aggravated the unemployment problem when casual and temporary employees in the state service were laid off. The votes of the Public Works Department, the largest employer of casual labour in the state sector, were severely pruned, with an inevitable contraction of its capacity to employ casual or temporary workers.
Unemployment was viewed as part of the wider theme of population pressure in the wet zone, and the most appropriate strategy—as British officials and the most influential of the political leaders of the day saw it—was to encourage the opening of the dry zone to relieve this pressure. This was especially true of underemployment among peasants in the plantation areas, and it was seen as the most viable solution to the problem of urban unemployment as well. The problem of urban unemployment called for more immediate short-term ameliorative measures, and here the government’s response was the provision of relief work. Ironically, the victims of unemployment for whom these measures were devised were often casual and temporary workers thrown out of work by the government’s own policies of retrenchment and cuts in public expenditure. In the city of Colombo, the municipality began to organize unemployment relief measures on a modest scale, but these were subsequently expanded under the aegis of the Central government to the more constructive enterprise of building and repair of roads, canals, flood protection embankments and swamp reclamation work. Similar measures, but of an ad hoc nature and far less ambitious in scale and constructive in scope, were organized by the municipalities of Kandy and Galle.
The country had hardly recovered from the effects of the Depression when large areas of it were devastated by the worst malaria epidemic of the century. The stricken areas were in the wet and intermediate zones of the country where malaria was not endemic—the Kegalla and Kurunegala districts. Ad hoc emergency measures were all that was possible and these the government provided, with its resources spread thin and wide in the process. Small wonder then that left-wing groups organizing relief work in the stricken areas and bent on demonstrating the vigour of their response, in contrast to that of the government, were able to make a strong impression on the people among whom they worked. Imaginative medical programmes designed to keep the disease at bay (there was no prospect of eradicating it) called for much greater financial resources than were available at a time of economic depression. One long-term solution was the extension of preventive health facilities in rural areas and especially to the regions in which the disease was endemic. This was resorted to with considerable success in the late 1930s and early 1940s.
By the mid-1930s, with the rise in prices of tea (which went up steadily) and rubber (which moved upwards far more rapidly),3 the terms of trade turned in Sri Lanka’s favour again: by 30 per cent between 1935 and 1937, and as much as 100 per cent if the comparison was between 1932 and 1937. As a result, unemployment eased considerably. Thus the number of Indian workers in the plantations increased from 4,38,000 in 1933 to 4,77,000 in 1935, though it fell slightly again to an average of 4,57,000 in 1936 and 1937; while the number of persons employed in the public service increased from 61,000 in November 1933 to 66,000 in November 1937. By the mid-1930s, there was also a distinct improvement in real incomes.
It was not always possible to restrain the impulse to social welfare by preaching the tenets of laissez-faire, especially where legislation broadening the scope of the state’s activity did not entail any heavy expenditure of revenue. There were instances, moreover, when the pressures of a democratic electorate were well-nigh irresistible because of the close connection of some aspects of social reform with religion. An example of this would be educational reform. Finally, there were spheres of activity in which powerful politicians were deeply interested and made it their special concern, such as D.S. Senanayake’s interest in peasant colonization in the dry zone. Perhaps the best example of the first category discussed here would be legislation for the protection of workers and their rights. In 1934, a Workmen’s Compensation Ordinance was passed, providing for benefits for certain categories of workers. A scheme of maternity benefits was introduced; although the actual financial benefits of the scheme were rather modest, it was nevertheless a landmark in welfare legislation. The Trade Union Ordinance of 1935 made registration of trade unions compulsory, devised means of securing trade union funds against defalcation by corrupt officials and, most important of all, protected trade unions from actions in tort. In 1938, an employment exchange was established in Colombo.
The Buddhist temporalities question, a problem over which the Buddhist activists had been agitating since the middle of the nineteenth century, was settled in 1931 with the passage of the Buddhist Temporalities Ordinance of that year. It conceded the demand for state intervention in, and supervision of, the administration of Buddhist temporalities. Significantly, this issue was settled long before the establishment of the Sinhala Mah• Sabh•. Unlike their predecessors in the Legislative Council, politicians of the first and second State Council were subject to the pressures of a popular electorate. Buddhist pressure groups could now work through the electoral process to influence elected state councillors. The ordinance which was passed in 1942 for the preservation of the sacred city of Anuradhapura was based on sober necessity, but lent itself to a reassertion of the link between religion and nationalism. While the government still prided itself on its neutrality in religious affairs, it had become more politic than ever before to underline the sense of special obligation towards Buddhism.
Once the problem of Buddhist temporalities was out of the way, Buddhist activists turned their attention to education. Educational reform was a special problem; it was part of the general trend towards social welfare and for that reason it had the support of radical groups that were pressing for greater equality of opportunity in education. The concept of ‘free’ education (which in reality meant no more than free tuition) had an irresistible appeal to the electorate because of its connotations of social justice and equality of opportunity. But it was also part of the wider theme of Buddhist–Christian confrontation and of the campaign of Buddhist activists against the Christian missions. For all these reasons it was much more controversial than other aspects of social welfare and aroused opposition not from Christians alone but also from some of the more powerful Sinhalese politicians. Educated in mission schools, attached to western concepts of secular government and the apparatus of political democracy, they were disinclined to yield to pressures from more vociferous Buddhist groups who agitated for state control over the mission schools.
In the late 1930s, the denominational system of education came increasingly under attack and the use of the educational process as a means of conversion to Christianity received an effective check. The Education Ordinance of 1939 was the harbinger of nearly a decade of radical and acutely controversial education reform in which the determination of the minister of education (C.W.W. Kannangara) to carry through a policy of far-reaching change was resisted by denominational interests and by influential colleagues in the Board of Ministers alike. When this ordinance was debated in the State Council, spokesmen for denominational interests opposed it with great vehemence and succeeded in securing the adoption by the State Council (by a vote of 27 to 26), despite the opposition of Kannangara, of an amending clause which read: ‘This Ordinance is not designed to give effect to any policy aimed against denominational schools’.
The strength of the resistance can be explained thus: by the instinctive distrust of the changes envisaged, demonstrated by the more influential political leaders of the day (most notably D.S. Senanayake); and by the fact that many of the members of the State Council, although themselves Buddhists, were alumni of mission schools and were susceptible to missionary influence. There was more to this than a sentimental attachment to the ‘old school tie’, for they had a deep-seated regard for the positive achievements of the mission schools and were unwilling for these to be jeopardized by the precipitate introduction of radical reform. Finally, the defence of the denominational principle was by no means confined to the Christian missions; the managers and principals of denominational schools controlled by Buddhists and Hindus, many of whom were state councillors (some in the Board of Ministers and others as members of the Council of Education itself), recognized that their own vested interests in education could best be protected by the maintenance of the status quo. However, in the early 1940s, despite their opposition, the role of the state in education was considerably enlarged at the expense of the missions. In the State Council, the Executive Committee on Education formed itself into a special committee by co-opting educationists and after long deliberation it produced in 1943 a report which recommended radical changes in the education policy.
The impulse to social welfare manifested itself most prominently and with much less controversy in the establishment of peasant colonization schemes in the dry zone, with conditions of land tenure designed to prevent fragmentation of holdings.4 D.S. Senanayake’s schemes for the restoration of the irrigation works of ancient Sri Lanka were a continuation of policies which had their origins in the twilight of the last Legislative Council. Under the new constitution and holding the key post of minister of agriculture, he had greater influence than ever before on the initiation and implementation of irrigation policy, and he demonstrated a visionary zeal in peasant colonization of the dry zone—as a return to the heartland of the ancient irrigation civilization of the Sinhalese. Characteristically, there was no commitment to a theory, or a blueprint, but instead a refreshing practicality and common sense in the drive and vigour which he provided in eliminating legislative and bureaucratic obstacles to quick decisions. There was by now a much greater appreciation of the potential value of the undeveloped dry zone. Its colonization seemed the only way out of the economic crisis of the Great Depression; and even before the government moved to promote it, there was a steady but significant stream of migrants there with Minneriya as the special attraction—striking evidence of a spontaneous response to economic and population pressure. Senanayake shared with Clifford (who had appointed a Land Commission) and influential British officials a faith in the peasantry as the key to the regeneration of the malaria-infested dry zone.
The legislation required to give legal form to the recommendations of the Land Commission was delayed despite the pleas of the commissioners that this should be prepared and passed as early as possible. Before the demise of the Legislative Council, the Land Settlement Ordinance of 1931 was enacted, reversing in effect the colonial government’s traditional policy on chēnas and chēna cultivation, and recognizing one-third of a century’s possession and occupation of land—including what earlier was chena—for the purpose of title against the claims of the crown. And the recommendations of the Land Commission had a strong influence on administrative decisions on land policy in the early years of the first State Council. When the Land Development Ordinance of 1935 was passed, it formalized most of the measures already taken in this way, or proposed in the reports of the Land Commission.
Before the introduction of this ordinance, the two focal points of land policy had been, first, village expansion schemes with settlements in rural areas and, second, colonization. When land was allotted for these purposes, the tenure adopted was based on the recommendations of the Land Commission. No direct financial assistance was given to settlers in colonization schemes, but the government did provide some of the services required to facilitate easy settlement. With the Minneriya scheme (1933) these services were expanded to include the entire cost of clearing the land, which practical experience had shown to be a great burden on settlers in the past, and colonists were exempted from payments of water rates for three years after settlement. Provision was also made for the settlement of ‘middle class’ colonists. Ownership of land in colonies was restricted to Sri Lankans and those possessing a Sri Lankan domicile of origin. Immigrant Indians, who had once been regarded as the ideal colonists for the development of the dry zone, found these settlements closed to them. The dry zone was to be the preserve of the indigenous peasant and to many the preserve only of the Sinhalese peasant.5
Indeed the establishment of colonization schemes in the dry zone had one far-reaching political consequence. The expanding frontier cut into the forests, which had stood for centuries as the barrier between the Tamil and Sinhalese areas of the island. Although this expansion did not go far at this time, there was a consciousness—especially among the Tamils, who were deeply suspicious of it—that an irreversible process had begun, and with it increasing prospects of a confrontation between the intruding colonists and the Tamil settlements in the Vanni, especially in the regions near the provincial boundary between the Northern Province and the North-central Province.
One other point needs emphasis. Although the establishment of viable colonization schemes in the dry zone and the economic development which they signified, were among the major achievements of the Donoughmore era, much more land was alienated in the village expansion schemes in the wet zone than in the colonization projects of the dry zone. The fact was that in the dry zone malaria was still a formidable problem, although no longer an insurmountable obstacle to the extension of the frontiers of settlement there.
The introduction of the Land Development Ordinance did not, for a few years at least, accelerate the rate of development of colonization. There were no new schemes established till 1939 when the decision was taken that the scale of aid given to the colonists should be rather more generous than it was. Experience had shown that the colonists had to face a grim struggle until their allotments yielded their first harvests. It was felt that the colonists were entitled to assistance from the state in money or services or both during this crucial period.6
One of the consequences of the outbreak of the Second World War was the extension of the life of the second State Council beyond 1940–41, when dissolution was due, to 1947. During this period the ‘constitutionalist’ leadership in the Board of Ministers was much more responsive to the need for initiatives in social and economic reform while with wartime prosperity, money was at last available on a scale to match the ambitions of politicians committed to policies of social welfare. The outbreak of the Second World War gave a fillip to the plantation industries of the island, especially with regard to rubber with Sri Lanka as the main, if not the only, source of natural rubber for the Allied powers after the Japanese overran Malaya and the Dutch East Indies. The rubber restriction scheme was abandoned and producers were encouraged instead to increase their output to the maximum extent possible by resorting to ‘slaughter-tapping’.7 But because all her rubber and tea were made available to Britain at fixed prices, Sri Lanka did not receive the full benefits of increased demand for scarce commodities which would have accrued to her had normal market pressures prevailed.
With regard to tea, prices were revised from time to time as the costs of production increased, but it is significant that when the contract system was done away with, there was a very substantial increase in tea prices. As for rubber, the price of 11d per pound f.o.b., which had been decided on by Britain, was recognized as being far too little considering the increased costs of production, the enormous wartime demand for rubber and scarcities in world supplies. As a result of pressure from producers in Sri Lanka, the price was raised by 3d a pound, but thereafter no increase was made despite a continuing agitation for fairer prices. Instead, the British government offered to compensate producers who were willing to ‘slaughter-tap’ their rubber trees to increase output; this compensation would amount to the repayment of the costs of capital replacement. Despite the artificial restraints on prices resulting from the contract system imposed by Britain, the plantation industries were nevertheless in a far healthier condition than they had been since the 1920s.
With the establishment of the South-east Asia Command and its network of bases on the island, heavy military expenditure by the Allied powers had an invigorating effect on the island’s economy. At its peak in 1944, this expenditure was estimated to be as much as Rs 435 million; in the previous year it was Rs 264 million. Both these were very large disbursements in relation to the size of the national income.8 The active money supply in the island increased by 69 per cent between 1942 and 1945. While this wartime prosperity inevitably raised inflationary pressures and contributed to increasing discontent among the white-collar and urban workers, its immediate effect was to place much larger financial resources than ever before in the hands of the Board of Ministers.
The main contribution of D.S. Senanayake to the welfare programmes of this phase continued to be in the field of peasant colonization. The regeneration of the peasantry remained the keynote of his land policy, just as the resuscitation of the dry zone was the central theme in his irrigation policy. Together, his land and irrigation policies had as their basis the assumption that there was, if not an identity of interests between the elite and the peasantry, at least a potentially harmonious relationship between these two conservative social groups. He saw the peasantry as a stabilizing element in the social order which was now under increasing pressure from a politicized and radical urban working class and white-collar workers. There was a greater urgency now about peasant colonization in particular and food production in general, for the country still depended on imported food supplies and was a long way from self-sufficiency. Wartime conditions greatly aggravated the problem when the traditional sources of supply of imported food were overrun by the Japanese. Investment on peasant colonization schemes in the dry zone was increased and the range of free services given by government to the colonists expanded well beyond what had been envisaged in 1939. Far more important, malaria, the age-long scourge of the dry zone, was at last losing its grip.
Traditional agriculture in all parts of the island and not merely in the dry zone benefited from incentives for food production which were introduced at this time. In 1942, an Internal Purchase Scheme was set up with a guaranteed price for rice set well above the world market rate; originally Rs 2.50 a bushel, by October 1943 this had been increased substantially to Rs 6.00. Introduced as a wartime measure, this guaranteed price scheme was retained thereafter as an essential and permanent feature of government assistance to traditional agriculture. Despite these and other measures, however, the island was still as dependent as ever on imports of food. Although rice imports in wartime remained at about half of what Sri Lanka had imported in 1930, the return of normal peacetime conditions in 1945 saw a steady increase in the imports of rice. But if self-sufficiency remained a distant dream, active support of traditional agriculture became an established feature of post-war policy. And the rapid development of the dry zone came to be viewed as the principal means of achieving self-sufficiency.
While D.S. Senanayake supported many of the other social welfare measures of this period—for example, the substantial increase of expenditure on health services and food subsidies—there were aspects of social reform which he viewed with the utmost suspicion. He was opposed, for example, to J.R. Jayewardene’s motion to make Sinhala the official language in place of English. The amendment—which was carried—to make Tamil and Sinhala together the official languages of the island had his support, as well as S.W.R.D. Bandaranaike’s, and the problem was settled in 1943–44 on the basis of this compromise. To Kannangara’s education reforms he was resolutely opposed, and here he was unable to have his way. The constitutional structure of the Donoughmore scheme left a great deal of the initiative in matters of social reform in the hands of individual members of the Board of Ministers and backbench pressure groups such as the younger members of the Ceylon National Congress, who carried these education reforms through despite his opposition.
The most controversial of Kannangara’s proposals was the recommendation that tuition fees be abolished at all levels of education, from the primary schools to the university. Had this ‘free’ education scheme, as it came to be called, been confined to the state schools, there would have been little opposition from denominational interests, but Kannangara was determined to bring the denominational schools within its purview. For this purpose he proposed to revise the grants-in-aid provided by the state to these latter schools, without which the great majority of them could not have survived. These new financial arrangements were regarded by the Christian missions especially as a potent threat to their interests.9
When Kannangara’s education proposals of 1943 were introduced for debate in the State Council in the latter half of 1944, there was a prolonged confrontation between the protagonists of the scheme and the advocates of denominationalism. The Board of Ministers was divided on this issue. G.C.S. Corea, the minister of labour, industry and commerce, led the opposition to these reforms in the State Council, while his colleague S.W.R.D. Bandaranaike10 was among their most ardent advocates, as for that matter were the members of his Sinhala Mah• Sabh• J.R. Jayewardene11 and the younger Congressmen. It was in June 1945 that the State Council gave its endorsement to these reforms, significantly at a time when D.S. Senanayake was out of the island on his mission to Whitehall to discuss questions relating to the reform of the constitution.
D.S. Senanayake’s opposition to these educational reforms was based on two main considerations. The first of these concerned the financial implications, for he believed that they would impose a severe strain on the economy and that expenditure would keep increasing. Second, his opposition sprang from the belief that they exacerbated the fears of the minorities. He was especially sensitive to the political implications of these tensions at a time when he was engaged in delicate negotiations to reach an understanding with the minorities on the terms of the transfer of power and when a new constitution for Sri Lanka was in the process of being drafted against the background of Whitehall’s requirement that any new constitutional structure would need to be adopted by a majority of three-fourths of all members of the State Council save the presiding officer and the officers of state.
The preparation of legislation to give effect to the Kannangara reforms took place at a time when the main point of interest was in the new constitutional structure that was to replace the Donoughmore scheme. For D.S. Senanayake these education reforms were of peripheral interest, but the advocates of the scheme were bent on securing the passage of legislation before the State Council was dissolved, and early in 1947 an ordinance incorporating the Kannangara proposals was introduced in the State Council. Denominational interests led by the Roman Catholics were quite as determined to have the debate on the ordinance postponed, in the hope no doubt that with the dissolution of the State Council and elections to the new parliament, the delay might give them the opportunity of influencing the preparation of a more congenial piece of legislation by someone other than C.W.W. Kannangara. The bargaining powers of the Christian minority were at a premium at this time, when a new constitution had been drafted in which limitations on the power of the new parliament (which was to replace the State Council) to enact legislation discriminating against any religious or ethnic community were a special feature and requirement.
There was now a polarization of forces, with the Roman Catholics leading the resistance and a Central Free Education Defence Committee, representing Buddhist interests, taking the issue before the electorate in an island-wide campaign to put pressure on the members of the State Council (who were about to face an election to the new parliament) to have the education ordinance enacted before the dissolution of the State Council. Their pressure proved more effective than that of the Roman Catholics and the Education Ordinance of 1947 was eventually approved by the State Council. Assisted denominational schools which did not come into the ‘free’ education scheme were to receive grants-in-aid on the old basis till 30 September 1948, after which all aid would cease. 12
This discussion of education reform would be incomplete without a reference to two of the most notable achievements of this period. First, there was the Central School Scheme, the establishment of large and well-equipped English secondary schools run by the state in rural areas. Originally, it was intended that these schools should provide a blend of the conventional academic education and more practical instruction in agriculture, commerce, handicrafts and domestic science; but in practice this latter aspect was neglected—when it was not forgotten completely—and education in Central Schools was modelled on the patterns of the prestigious urban secondary schools run by the Christian missions and other private organizations. Where previously the state had one such school—the Royal College in Colombo—by 1944 there were fifty. With the abolition of tuition fees after 1945, these Central Schools became ‘one of the major avenues of advancement for the rural child’.
Second, there was the establishment of the University of Ceylon in 1942 as a culmination of a process which had begun in 1921 and been prolonged because of a controversy over the choice of a site for the university, among other reasons. The Ceylon University Ordinance of 1942 created an autonomous university incorporating the old Medical College as one of its faculties; it was envisaged that when it was transferred from Colombo to its site in Peradeniya near Kandy, it would become a residential institution. The physical transfer to Peradeniya began on a modest scale in the late 1940s but was accelerated in 1952 with the shift of the arts faculty. The shift to a site near Kandy was supported partly at least in the belief that the new university would be ‘the focus of a cultural renaissance’. During the period surveyed in this chapter, the university continued to be in Colombo. Its student enrolment increased from 904 in 1942 to 1,554 in 1947 despite the competing attraction of external degrees of London University. Tuition fees were abolished with the educational reforms of 1945.
The unemployment problem eased considerably in the early 1940s and disappeared altogether in the period 1942-45, when the military bases established on the island under the south-east Asia Command provided employment opportunities for the local population as civilian workers and in ancillary services. By 1945, as many as 83,500 civilians were employed on these bases. The demand for labour was not confined to the defence services; all sectors of the economy were affected. In 1939, the Colombo Employment Exchange had 25,000 registered unemployed; in 1941, the number had dropped to 2,000 and this had fallen to a mere 1,000 in 1944. (By 1945, with the ending of hostilities, this figure had increased again to 10,000.13) If increased defence expenditure and the establishment of military bases provided a short-term solution to the unemployment problem, the increase in the active money supply led to inflation. The rise in the domestic price level in Sri Lanka during this period was much greater than the contemporary price inflation in Britain. Official statistics showed a 35 per cent increase in the working-class cost of living index between 1942 and 1945; but the actual increase in the domestic price level has been estimated at 69 per cent. Inflationary pressures might well have been more severe had export prices not been prevented from reaching their free market level by bulk purchase agreements and the lack of shipping space.14
The inevitable consequence of these inflationary pressures was increasing discontent among the working class and white-collar workers, which did not erupt into major strike activity only because of restrictions on strikes during wartime and from the lack of encouragement by the Communist Party, which became the most influential force among the urban working class after the LSSP had been proscribed.15
The government sought to cushion the effect of these pressures by raising wages and salaries. From March 1942, a special war allowance based on the Colombo working-class cost of living index was paid. And on the plantations the minimum wage of estate labour was increased. But none of these increases in wages kept pace with inflation. The government resorted also to a policy of controlling prices and rationing essential consumer goods, mainly food and textiles. From the middle of 1943 it went a stage further in freezing the prices of several important food items, as well as subsidizing others, and importing as well.16 Much of the distribution of rice, wheat flour and sugar was taken over by the state in order to make price control and rationing more effective. These food subsidies, introduced in 1943 as a wartime measure to control inflation, were continued thereafter to become one of the island’s social welfare services. No doubt, they were retained as a means of blunting the growing challenge of the Marxist left who were moving in after the end of the war to use working class and white-collar discontent over inflation in a campaign of trade union action directed against the government.
One other area of importance in social welfare needs to be mentioned. The last major malaria epidemic—that of 1934–35—underlined the inadequacies of the medical facilities in the country. The latter were concentrated in the principal towns, while the rural areas had little or nothing by comparison. A programme of investment in new hospitals in rural areas (called ‘cottage hospitals’) was initiated and there was increased emphasis on preventive medical facilities in all parts of the country. These had a notable impact on the living conditions of the people.
All in all, the social legislation of this period laid the foundations of a welfare state on the island. A high-calibre Social Service Commission was appointed in 1946 to review the progress that had been made and to suggest ways and means of expanding and financing social welfare. Although the commission stressed the importance of adopting a Health Insurance Scheme, an Unemployment Insurance Scheme, a National Provident Fund—to be financed partly by employers and partly by contributions from employees themselves—and an Old-age Pension Scheme, they were alive to the financial costs of such a programme. They pointed out that wartime prosperity was transitory and should not be regarded as the norm in discussions concerning the financial feasibility of a reasonably comprehensive social welfare scheme, a conclusion which ‘ran counter to the rising expectations of the Ceylonese radicals’.
The demographic patterns of the early twentieth century continued through much of this period. Population growth reached the quite unprecedented rate of 25.4 per cent in the years between 1931 and 1946, reflecting a continued decline in the crude death rate and a fall in fertility as well. Immigration increase was a mere 69,552 as against a natural increase of 1,280,000. There was accelerated emigration of Indian workers to India in the wake of the Depression. Population increase was greatest on the south-west coast which by 1946 contained 40 per cent of the island’s total population. The Western Province itself recorded an increase of 29.9 per cent. Overall population density for the whole island reached 102 per sq. km in 1946; that of Colombo district doubled from 855 in 1901 to 1,758 in 1946. The Jaffna region which comprised the peninsula and groups of islands was characterized by dense settlements throughout. The relative population of this region declined from 8.5 per cent in 1901 to 6.4 per cent in 1946.
One new demographic pattern emerged in this period—the rapid population growth in the main dry zone provinces.
The North-central Province recorded the highest growth rate of all—43.4 per cent—with the development there of peasant colonization schemes, the restoration of irrigation works and the conquest of malaria. The Northern Province and Eastern Province recorded growth rates of 20.2 and 31.4 per cent respectively for 1931-46.
One needs, however, to guard against exaggerating the importance of the DDT programme, which became well established in 1946, as a factor in bringing down the crude death rate. For one thing not all parts of the island were malaria-ridden: for example, the densely populated south-west and nearly all parts of the wet zone, as well as the Jaffna peninsula, were not. Besides, the fall in the crude death rate had already become perceptible in 1945. Nevertheless, once the spraying of DDT became standard practice it contributed greatly to sustaining—and accelerating—the decline in the crude death rate in the late 1940s. As a result, there was a phenomenal increase in population in the years after independence. Meanwhile, the expanded school system and the much greater access to education increased the number of students aspiring to white-collar jobs at a time when the economy was not expanding at the same pace as the population, in particular the school-going population. Thus an unprecedented increase in population growth and the rising expectations of an increasingly educated population created an almost unmanageable situation for Sri Lanka’s leaders in the first decade after independence.