No dearness allowance, increment for govt employees

There will be no proposal to increase the dearness allowance for government employees in the next budget, officials familiar with the matter said, refuting media reports that earlier claimed such an increase was on the cards.

Besides, no decision has been made about giving government employees any additional increments as well.

According to Finance Division sources involved with preparing the budget, a committee will be formed after the budget to review the prospects for government employees.

Government employees are currently under the salary structure as per National Pay Scale 2015 recommended by the 8th pay commission formed under former governor of Bangladesh Bank Mohammad Farashuddin. The scale is usually revised when the government sees fit.

In its recommendation for the ongoing fiscal year 2022-23 (FY23), the 8th Pay Commission dictated that no new salary commission will be formed from now on. Instead, there will be a salary increment at the rate of 5 per cent every year as per the decision of this commission.

However, the commission had proposed to increase the rate taking inflation into account. A high-level committee led by the finance minister was created in this regard but the recommendation was never.

Ministry of Public Administration data shows that there are 14 lakh government employees in the country. If we take the teachers under various corporations and MPOs, the number will be around 22 lakh.

Sources said the finance minister is planning to propose a Tk 77,000 crore allocation for the salaries and allowances of government employees in the next budget, which is Tk 1990 crore higher than FY23.

Regarding the earlier media reports on dearness allowance for FY24, sources said the government was mulling over the issue. However, it backed away from increasing the allowance considering the high cost burden.

As per a Finance Division calculation, a 10 per cent, 15 per cent and 20 per cent increase of the allowance would increase the budget size by Tk 4,000 crore, Tk 6,000 crore and Tk 8,000 crore respectively.

AB Mirza Azizul Islam, a prominent economist and former financial advisor of the caretaker government, told The Business Post, “The budget should focus on controlling inflation. But the inflation is owed to mostly external factors, making it very difficult to control through our internal measures.

“Therefore, the marginal communities should be brought under a social safety net programme with sufficient allocation. Proper disbursement of the allocation needs to be ensured as well.”

He added, “There have been talks of dearness allowance for government officials but what about others who are working in the private sector? I don’t support a discriminatory policy.”

Former Cabinet Secretary Ali Imam Majumdar said, “The prices of commodities have increased by at least 50 per cent in the last eight years. Government employees must be given dearness allowances and pensioners should also be included in this. Secretaries in India get three times the salary compared to those in Bangladesh.”

However, in regards to possible discrimination between government employees and private consumers due to an increase in the allowance, he said the government does not take the responsibility of private consumers in any country. Authorities concerned in the private sector can take initiatives to increase the salaries and allowances of their employees.

Meanwhile, corresponding with AB Mirza, Economist Zaid Bakht said the budget should prioritise taming the inflation.

“The bottom line is we are under inflationary pressure and it is not going away anytime soon. So the government expenditure should be kept under control. The production expenses should be given importance to keep the inflationary pressure tolerable.”

Regarding the dearness allowance, he said, “The cost of living has increased due to inflation and it is difficult to form a new pay commission. In these cases, benefits like dearness allowance are given. The government can give it if wishes to.”