Pay bonanza for govt staff amid inflation, energy crisis

Employees will also receive a house rent allowance of 50-60%, along with medical, education, transport and mobile phone allowances. Including these benefits, total monthly remuneration for a 20th-grade employee will reach around Tk35,000.

Grade 9 is the entry level for BCS cadre officers and first-class non-cadre officials. Their basic pay, which rose from Tk11,000 in 2009 to Tk22,000 under the 2015 pay scale, will double again to Tk44,000 under the new structure – a 300% increase from 2009.

Private sector employees in similar stages receive much less salary.

At the top of the hierarchy, Grade 1 basic pay will double to Tk156,000 from Tk78,000. Secretaries generally fall under this grade. Their basic pay was Tk40,000 in 2009, meaning it will have risen 290% over the period.

The new basic salaries will be introduced in three phases from 1 July this year to 1 July 2027, with all allowances taking effect simultaneously from 1 January 2028. Public servants retiring from July this year onwards will also receive pensions calculated under the structure.

Cabinet Secretary Nasimul Gani told journalists after the Cabinet meeting that the scale was approved considering the government’s financial capacity, the broader economic situation, inflation, living costs, public servants’ living standards, and the need for a balanced and rational pay structure.

However, sources said several ministers opposed implementation amid the government’s financial constraints and difficulties in financing higher energy import costs. Prime Minister Tarique Rahman approved the proposal after hearing the ministers’ views, they said.

Gani was also asked whether MPO-listed teachers would be covered by the new pay scale. He replied, “I cannot say at this stage. A decision will come when the matter is settled.”

Asked whether the government had any plans regarding journalists’ salaries, he said the issue had been discussed, but it was too early to say what decision would follow.

Government-appointed FBCCI administrator Md Fazlur Rahman said the phased implementation would not put significant pressure on private-sector wages or fuel inflation.

“Private-sector employees know their companies are stagnant. As the new pay structure will be implemented gradually, it will not significantly fuel inflation or force private firms to raise wages,” he told TBS.

In a press release, the Cabinet Division said the new pay scale would strengthen public servants’ financial security and motivation while helping build an efficient, dynamic and people-oriented administration.

When the 8th National Pay Scale was introduced in 2015 with a 100% increase in basic salaries, then finance minister Abul Maal Abdul Muhith said higher pay would curb corruption and restore dynamism to the administration.

Mahbub Ahmed, finance secretary at the time, told TBS yesterday that corruption had instead increased after the pay hike. “Corruption cannot be directly linked to whether a new pay scale should be introduced. Many officials are honest and shouldn’t remain on the same pay scale for 11 years,” he said.

One rank, one pension

The new pay structure also proposes a “one rank, one pension” system for military and civilian personnel, in line with the BNP’s election manifesto.

Currently, military officers appointed to civilian organisations can receive pensions from both positions, with the same provision applying to civilian officials. 

The dual-benefit system will be abolished and replaced with one-rank, one-pension. As data on civilian retirees before 2019 are unavailable, the system will be phased in by 2030.

The government will also raise pensions for long-retired public servants who receive much less than those retiring today from equivalent positions.

Pensions of up to Tk9,000 will be doubled; those of Tk9,001-20,000 will rise 75%; Tk20,001-30,000 by 65%; Tk30,001-40,000 by 60%; and pensions above Tk40,000 by 55%.

Employees with children with disabilities will receive Tk3,000 a month for each child with special needs. Mobile phone allowances, previously available only to officials up to Grade 5, will now be extended to all government employees.

From dearness allowance to new pay scale

Following the fall of the Hasina government, the interim government announced a dearness allowance amid protests by public servants. It later dropped the plan after facing criticism for raising VAT on more than 100 products to boost revenue.

The interim government subsequently formed a pay commission, despite no fresh demand from public servants. The commission recommended a new structure days before the election, proposing salary increases of 100% for Grade 1 and up to 142% for Grade 20.

The interim government left office without implementing the recommendations, leaving the elected government to do so and creating pressure for their adoption.

The BNP had pledged a new pay scale in its election manifesto. Given the government’s limited financial capacity, the Cabinet, chaired by Prime Minister Tarique Rahman yesterday, decided to implement it in four phases over two years.

Lessons from the 2015 pay scale

In 2015, a pay commission headed by Dr Farashuddin recommended doubling public servants’ salaries and introducing a 5% annual increment.

It also recommended no further pay commissions, with annual increments to be adjusted for inflation whenever it exceeded 5%. The commission proposed scrapping the time-scale and selection-grade systems and automatically promoting officials to the next grade after 10 years without promotion.

Mahbub Ahmed, who was the finance secretary when the 2015 pay scale was implemented, told TBS yesterday that the government had planned a Finance Division wing to calculate inflation and recommend annual increments accordingly.

“But that did not happen. I can’t remember why,” he said.

As inflation rose amid the Russia-Ukraine war, the then Awami League government introduced an additional 5% incentive on top of the regular 5% annual increment after the 2024 election. The interim government later raised the incentive to 15%, which remains in effect. Public servants will lose the incentive once the new pay scale takes effect.