Federalism has long been advocated as a means of resolving the ethnic issues and unbalanced development in Sri Lanka. As the unitary state has resulted in uneven development across Sri Lanka the Western Province dominates over the other 8 provinces. Despite declining regional disparity Western province continues to contribute most to the Gross Domestic Product(GDP) contributing 42% of the GDP while the second highest the Southern Province only represents 10.8% of the GDP while Uva and Northern provinces representing the least with 5% and 3.6% respectively. Other provinces also have trouble attracting capitals. This has resulted in calls for the abolishing of the unitary system and powers being devolved.
Further federalism has also been proposed as an solution the ethnic issues. The Tamil minority is under represented despite being the majority in the Northern province. This also lead to a civil war between the government and Tamil Nationalist militants. After the end of the war Northern province shares the troubles of finding funds to rebuild damaged infrastructure and as a result of provincial governments being unable to finance the reconstruction of destroyed factories and damaged infrastructure to create employment. Federalism has been proposed as a method for sharing power.
Several heads of states such as S.W.R.D Bandaranaike, J.R Jayawardena, Chandrika Kumaratungea have also accepted Federalism as a solution to the island's issues however did not implement a federal system.