Tk 350b allocated for new pay structure of govt officials and employees

The Government allocated Tk 350 billion (35,000 crore) in the 2026–27 national budget to implement the recommendations of the new Pay Commission for public-sector employees.

From 1 July, government officials and employees will receive 50 per cent of the recommended revised basic salary. They will receive the remaining 50 per cent in the following financial year.

The government will introduce the recommended allowances in the subsequent financial year.

Consequently, government employees will receive the full package of revised salaries and allowances from the 2028–29 financial year. Sources within the Finance Division of the Ministry of Finance confirmed this information.

On 11 June, Finance and Planning Minister Amir Khasru Mahmud Chowdhury will present a Tk 9.38 trillion budget for the new financial year in the Jatiya Sangsad (National Parliament).

In his budget speech, the Finance Minister is expected to address matters relating to government employees and may explain why the government has decided to implement the Pay Commission's recommendations only partially at this stage.

Responding to a question from Prothom Alo on 17 May, the finance minister said, “We face budgetary constraints. We are operating under difficult circumstances. The economy is in poor condition, and revenue collection remains weak relative to gross domestic product (GDP). As a result, we have had to omit and reduce many expenditures. Even so, we must also address the issue of the new pay structure.”

The current 2025–26 budget allocates Tk 841.14 billion for the salaries and allowances of government employees.

The new Pay Commission recommended that the Government would require an additional Tk 1.06 trillion in the next financial year.

If the Government fully implemented the Commission’s recommendations during the next financial year, expenditure on salaries and allowances alone would reach Tk 1.90 trillion.

Nearly 12 years after the Eighth Pay Commission, the government established the Ninth National Pay Commission on 27 July 2025.

Former Finance Secretary Zakir Ahmed Khan chaired the 23-member commission.

On 21 January, the commission submitted its report, containing recommendations for increases in salaries and allowances, to the then Chief Adviser, Professor Muhammad Yunus.

Two months after the BNP Government assumed office in February, the Government formed a 10-member committee on 23 April to oversee implementation of the new pay structure.

Cabinet Secretary Nasimul Ghani chaired the committee. The committee recommended implementing the new pay structure in three phases. Sources in the Finance Division stated that the Government has ultimately decided to follow this recommendation.

Before finalising its report, the Pay Commission considered a range of factors, including data from the Bangladesh Bureau of Statistics (BBS), cumulative inflation, salary and allowance structures in neighbouring countries, alignment with the private sector, and overall living standards.

In the middle of last month, Finance Minister Amir Khasru Mahmud Chowdhury discussed various aspects of the budget with Prime Minister Tarique Rahman at the secretariat.

The implementation of the new pay structure for government employees also featured in those discussions.

According to sources, the Prime Minister approved the recommendation made by the committee led by the Cabinet Division Secretary to implement the pay structure in three stages.

The Finance Minister has not made any recent public statement on the matter.

However, after his discussions with the Prime Minister, he told Prothom Alo, “The implementation of the new pay structure will begin from the next financial year, that is, from 1 July. Work is under way to determine the most effective method of implementation.”

Following the Prime Minister’s positive indication, Nasimul Ghani’s committee met again on 21 May to discuss implementation of the new pay structure. Sources stated that during this meeting the committee reached a final decision that government employees would begin receiving the revised salary from 1 July.

The Ninth National Pay Commission has recommended salary increases ranging from 100 to 140 per cent under the proposed pay structure. However, it has recommended retaining the existing 20 pay grades (steps).

The Commission has proposed increasing the current minimum salary from Tk 8,250 to Tk 20,000 per month. It has also recommended raising the maximum salary from Tk 78,000 to Tk 160,000 per month.

In addition, the Finance Division will create a separate pay grade outside the existing 20-grade structure for the Cabinet Secretary, the Principal Secretary to the Prime Minister, and Senior Secretaries.

The Government will later issue this arrangement through an official gazette notification.

When contacted, Finance Secretary Md Khairuzzaman Mozumder declined to comment on the matter.

However, former Finance Secretary Mahbub Ahmed told Prothom Alo on Monday that the government's current revenue collection situation does not make full implementation of the recommendations within a single financial year realistic.

He said that the government's plan to implement the recommendations in phases is appropriate.

When asked whether the government should provide the full revised salary and allowances from the following financial year if it achieves its revenue collection target in the next financial year, Mahbub Ahmed replied, “I would have liked to say yes, but I cannot. The likelihood of achieving such a high level of revenue collection is also limited. On the other hand, the government has prioritised the social safety net sector, which is necessary. We expect substantial expenditure in this area. Therefore, implementing the revised salaries and allowances in phases would be the most reasonable decision.”

The Commission has recommended increasing pensions for retired government employees by more than 100 per cent, in addition to raising the salaries of serving public employees.

According to the recommendations, pensioners who currently receive less than Tk 20,000 per month could receive an increase of approximately 100 per cent.

Those receiving monthly pensions between Tk 20,000 and Tk 40,000 could receive increases of up to 75 per cent. Pensioners receiving more than Tk 40,000 per month could see their pensions rise by up to 55 per cent.

The Commission has also recommended a medical allowance of Tk 10,000 per month for pensioners aged over 75.

Pensioners aged between 55 and 74 could receive a medical allowance of Tk 8,000, while those under the age of 55 could receive a medical allowance of Tk 5,000.

In addition, the Commission has recommended a comparatively smaller increase in house rent allowances for higher-paid government employees in Grades 1 to 10.

Meanwhile, the commission has recommended relatively larger increases in house rent allowances for employees in Grades 11 to 20.

Former Cabinet Secretary Ali Imam Majumder, who also served as an adviser to the previous interim government, spoke to Prothom Alo by telephone on Monday regarding the matter.

He said that there is broad agreement on the need to increase salaries and allowances for government employees. He added that it would have been preferable to implement the recommendations in full from the next financial year.

However, given the government's current revenue situation, that will not be possible this year.

Ali Imam Majumder said, “As a pensioner, I receive Tk 34,000 per month. I spend that entire amount on purchasing medicines. We hope that the Government will be able to implement the new pay structure in full from the 2027–28 financial year.”