Additional Tk 80,000 Crore Burden from New Pay and Allowance

Implementing a new pay and allowance structure for government employees will require a substantial amount of additional funding. According to proposals submitted by the Pay Commission, full implementation of the revised structure would cost an extra Tk 80,000 crore, while the government’s current annual expenditure on salaries and allowances stands at around Tk 85,000 crore.

Finance Adviser Dr Salehuddin Ahmed said the financial burden of the increased expenditure would largely fall on the next government.

The Pay Commission is scheduled to submit its report to the Chief Adviser at the state guest house Jamuna at 5:00pm on Wednesday. The report will be handed over by Commission Chairman Zakir Ahmed Khan, accompanied by commission members. The finance adviser and the finance secretary will also be present.

With only 20 days remaining in the tenure of the interim government, questions have arisen over whether the new pay structure can be implemented at this stage. In response, the finance adviser said that Pay Commission recommendations are not implemented verbatim. Several review committees typically examine the report, a process that usually takes three to four months. While he did not rule out implementation by the current government, he noted that submitting the report itself is a significant step.

Sources said the current minimum salary of Tk 8,250 is proposed to be increased to more than double, while the maximum salary is recommended to be raised from Tk 78,000 to over Tk 120,000. The commission has proposed maintaining a 1:8 ratio between the lowest and highest pay grades.

Plans are in place for partial implementation from January 1, 2026, with the full structure expected to take effect from the first day of the 2026–27 fiscal year.

In the revised budget for FY2025–26, the government has increased allocation for salaries and allowances by Tk 22,000 crore, which is being viewed as preparation for partial implementation. However, an additional Tk 70,000–80,000 crore will be required to fully enforce the new pay structure.

At present, around 1.5 million government officials and employees receive salaries under the 2015 pay scale. Including members of the armed forces, employees of banks and financial institutions, and teachers of government educational institutions, the total number of beneficiaries is estimated at around 2.4 million.

Expressing optimism, the finance adviser said government employees would be satisfied with the revised structure. He added that the recommendations were made after carefully considering the country’s fiscal capacity, resource constraints, and inflation, and assured that the changes would not have a negative impact on the market.

He also noted that on January 27, the research organisation PRI is expected to submit an important report on tax policy to the Chief Adviser. Future revenue management and implementation of the new pay structure will depend significantly on the findings of that report.