Before the present government’s term ends, it is faced with a dilemma over whether to pay public servants dearness allowances or two increments in the next budget.
Dearness allowances paid to government staff will have an impact on the market and commodity prices.
But it is not expected at this moment, said a senior official of the Finance Division, who is involved in the budget implementation process.
He said, public servants would therefore prefer to be paid an increment instead of dearness allowance.
The country’s inflation on point-to-point basis rose by 0.66-percentage point in April and reached 8.37%, according to the Bangladesh Bureau of Statistics (BBS).
Experts and economists blame it on the on-going political turmoil, which seriously disrupted the supply chain.
Two days ago, Finance minister AMA Muhith told the Dhaka Tribune he was still undecided about payment of dearness allowances for the next fiscal year.
“We will consider the matter after talking with the high-ups of the government,” he said.
The minister said it would be clarified on June 6, when the budget is announced.
Last week, at a cabinet committee meeting on economic affairs, Muhith said the previous government had formed a pay commission and he would form another.
The move is aimed at narrowing the gap between the salaries of government and private-sector employees.
He said: “This will help reduce corruption of government officials and make government jobs more attractive.”
The announcement comes seven months before the Awami League-led coalition government completes its five-year term.
The Seventh Pay Commission was formed on August 31, 2007, at the time of the last caretaker government (CG), and finance advisor AB Mirza Azizul Islam announced 20% dearness allowance in the budget.
After the incumbent government assumed office in January 2009, it announced a new national pay scale in November of the same year, as per the commission’s recommendations.
Under the new pay scale, the take-home salary of a top level government servant was fixed at Tk40,000 and the basic pay of the lowest-ranking employee was fixed at Tk4,100.
Previous national pay commissions were formed in 2005, 1996, 1989, 1976 and 1972.
The AL government announced 20% dearness allowance in 2009, which cost Tk50bn, while Tk200bn was spent on implementing the 2005 pay scale.
There are 1.1m staff members in the administration in total.
The president of the Secretariat Personal Officials Association, Mujahidul Islam Selim, told the Dhaka Tribune the secretaries of the public administration and the finance ministry has assured them about dearness allowances in the next fiscal year.
“We have already placed our seven-point demands to the prime minister, which includes a salary hike,” he said.
Selim said: “When there has been an increase in price levels by 40% over the last five years, there was no increase in salaries.”
