INTRODUCTION The on-going debate on devolution and power sharing in Sri Lanka has also brought into focus the need to overcome regional imbalances in development. While regional development has been of central importance in the agenda of post-independence governments there has not been an overall vision for the purpose. As a consequence while significant gains have been achieved in the quality of life and income level of the Sri Lankan population (per capita GNP rose from US$ 273 in 1980 to 841 in 2000 poverty continues to assail large numbers of the urban and rural population. Marked regional inequalities exist between the 'core' and the 'periphery'. There are also inter and intra regional differences within the periphery itself