New pay scale for govt employees to be implemented in 2 phases instead of 3
The government is set to implement a new pay scale for public sector employees in two phases instead of the previously proposed three. Under the revised plan, the new basic salary could take effect from 1 July, while allowances will be introduced at the start of the 2027–28 fiscal year.
At the same time, the rate of salary increases may be slightly lower than that recommended by the Ninth Pay Commission, according to sources at the Finance Division of the Ministry of Finance.
While presenting the national budget in Parliament on 11 June, Finance and Planning Minister Amir Khasru Mahmud Chowdhury announced that the new pay scale for government employees would be implemented from the 2026–27 fiscal year.
He said public servants had been receiving salaries and allowances under the same pay scale for nearly 11 years. During that period, the cost of living had risen significantly due to inflation. Therefore, the new pay scale would be introduced in phases from 1 July.
According to Finance Division sources, the implementation committee initially recommended introducing the new pay scale in three phases.
Under the revised plan, the new basic salary could take effect from 1 July, while allowances will be introduced at the start of the 2027–28 fiscal year. At the same time, the rate of salary increases may be slightly lower than that recommended by the Ninth Pay Commission.
Under that proposal, 50 per cent of the commission’s recommended basic salary would have been implemented from 1 July 2026, the remaining 50 per cent from 1 July 2027, and the revised allowances from the 2028–29 fiscal year.
However, after working through the implementation calculations, the committee found that the plan created a number of complications.
For many employees, annual increments had already pushed their existing basic salaries to a level where implementing only 50 per cent of the new basic pay would result in only a marginal increase in actual earnings.
In some cases, employees’ total salaries could even decrease. Following objections from government employees, the implementation committee revised its proposal. It is now recommending that the new basic salary be introduced from 1 July, with the revised allowances taking effect from the beginning of the 2027–28 fiscal year.
When contacted, former Finance Secretary Mahbub Ahmed told Prothom Alo on Sunday that if the government had sufficient fiscal capacity, it would have implemented the new pay scale in one go.
However, he said implementing it in two phases instead of three would still be a better option. At the same time, he stressed that government employees should focus on increasing revenue collection.
If the government had sufficient fiscal capacity, it would have implemented the new pay scale in one go. However, he said implementing it in two phases instead of three would still be a better option. At the same time, government employees should focus on increasing revenue collection.Mahbub Ahmed, former finance secretary
On 21 April, a 10-member committee headed by Cabinet Secretary Nasimul Ghani was formed to review the recommendations of the Ninth Pay Commission.
The committee includes the principal secretary to the prime minister, the finance secretary, the public administration secretary, the law secretary, the defence secretary, the secondary and higher education secretary, the health services secretary, the principal staff officer of the armed forces division, and the comptroller general of accounts.
Sources said reports on separate pay scale for the civil administration, judiciary and armed forces are also nearly finalised. Only the issuance of official notifications now remains.
Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB), told Prothom Alo that, in addition to the funds required for the new pay scale, the general public would ultimately have to bear the added burden through higher prices and an overall increase in the cost of living.
“Therefore, to ensure professional excellence and accountability for corruption-free performance by public servants, it is essential that their asset declarations be made public,” he said.
Budget allocation and CPD's observations
Under the existing eighth pay scale, the minimum basic salary is Tk 8,250 and the maximum Tk 78,000. The Ninth Pay Commission has recommended raising the minimum basic salary to Tk 20,000 and the maximum to Tk 160,000.
CPD Executive Director Fahmida Khatun said that before implementing the new pay scale, the government should carefully consider its fiscal capacity, the budget deficit, borrowing requirements, and the potential impact on the overall economy.
According to the commission's estimates, fully implementing these recommendations would require an additional Tk1.06 trillion (106,000 crore) annually.
An economic analysis of the operating and development expenditure in the proposed budget for the 2026–27 fiscal year allocates Tk 898.36 billion (89,836 crore) for salaries and allowances of government employees, which is not significantly higher than the revised allocation for the current 2025–26 fiscal year.
However, Finance Division officials said Tk 1.14 trillion (141,434 crore) has been earmarked under the ‘Public Administration – Net’ heading in the ‘Use of Resources in the Operating and Development Budget' section.
This is Tk 545.72 billion (54,572 crore) more than the revised allocation for the current fiscal year. According to the officials, at least Tk 440 billion (44,000 crore) of this additional allocation has been set aside for government employees, MPO-listed teachers and pensioners.
In an analysis published on the Centre for Policy Dialogue (CPD) website on 27 January, CPD Executive Director Fahmida Khatun said inflation has risen sharply since 2015, making an adjustment to the salaries of public servants justified.
However, she noted that before implementing the new pay scale, the government should carefully consider its fiscal capacity, the budget deficit, borrowing requirements, and the potential impact on the overall economy.