The National Commission on Macroeconomics & Health commissioned this study, which was funded by the World Health Organization for a methodological review of the present allocation procedures adopted by the Government of Sri Lanka with an objective to review the current basis of resource allocation procedures that can be changed to promote equity and efficient resource utilization. This study is considered important in order to streamline the provision of services at national and provincial level. This report of the commission provides a situation analysis of the existing health and healthcare contexts in Sri Lanka.