The government will use around 20.52% of the next national budget to pay its debt interests, recapitalise ailing state banks, and implement the pay hike of public servants, Finance Division sources have said.
Of the Tk62,000 crore to be allocated for these purposes, around Tk22,000 crore alone would be used to pay the increased salaries of government employees, the sources said, adding that the new budget outlay might be Tk302,000 crore – 25% more from the current revised budget of Tk240,000 crore.
State Minister for Finance MA Mannan told the Dhaka Tribune that the government would allocate enough funds in the next budget for execution of the new pay scale and meet other revenue expenditures.
There would not be any problem as long as the country’s revenue collection remained stable, he said.
Sources at the Finance Division said Tk22,000 crore will be put aside as a block allocation to meet the pay commission recommendations for salary, while more funds would be sanctioned if needed.
The allocated amount is expected to be enough for covering all the increased salaries of around 21 lakh government employees; however, it would fall short in covering the newly proposed bonus for Bangla new year.
Without accounting for allowances and bonuses, an earlier proposal had suggested that the government should allocate Tk15,000 crore to pay the regular salaries of its employees.
For the 2014-15 fiscal year, the government had allocated Tk14,060 crore to pay salaries to its employees and an additional Tk15,915 crore for their allowances.
Meanwhile, according to budget documents, Tk35,000 crore – which is almost one-third of the ADP – will be paid as interest for local and international loans in the next fiscal year, with most of it being used for local interest payment especially savings instruments. Under the current revised budget, government’s payment of interest is Tk31,000 crore.
Also, in a bid to recapitalise ailing state-owned banks, the government has decided to set aside Tk5,000 crore for the next fiscal year; this money is also part of the Tk62,000 crore allocation in the budget.
Two weeks ago, a secretary-level review committee submitted its recommendation to Finance Minister AMA Muhith, keeping the existing 20 grades and removing provisions for time scale and selection grades.
Muhith had earlier said the pay commission recommendations would be executed from July 1 this year after the cabinet gives its consent.
