Despite being rich in gem resources, the Passara, and Lunugala areas of Sri Lanka continue to experience poor economic and social development, lagging other regions of the country. This disparity raises the need to examine the underlying causes of their stagnation, despite the potential of the gem mining industry to drive growth. Therefore, the research problem seeks to explore "How do socio-economic challenges, financial inequities, and traditional practices in the rural gem mining industry of Passara, and Lunugala in Badulla district hinder its contribution to sustainable development and equitable growth?". Hence, the objectives of this study are two-fold: firstly, to identify the socio-economic challenges faced by workers and owners in the rural gem mining industry of Passara, and Lunugala. Secondly, to investigate financial disparities and power dynamics between investors/ owners and workers in the gem mining sector, focusing on their impact on sustainable development. The research adopts a qualitative approach, employing interpretivism and inductive reasoning to assess the experiences, challenges, and aspirations of five investors/owners and fifteen workers in gem mining. The findings highlight critical socio-economic hurdles, financial disparities between owners and workers, and the need for policy interventions to foster equitable growth and environmental sustainability. Key recommendations include implementing Environmental Social and Governance (ESG) practices, advancing mining techniques, and introducing robust labor laws.
