The Ninth National Pay Commission yesterday proposed a new salary structure for government employees, recommending increases ranging from 100 percent to 142 percent, alongside substantial rises in other benefits.
If implemented, the proposals will require an additional annual expenditure of more than Tk 1 lakh crore.
The 21-member commission, led by former finance secretary Zakir Ahmed Khan, submitted its report to Chief Adviser Prof Muhammad Yunus at the Jamuna in the evening.
The commission recommended 20 pay scales, with the minimum salary proposed to rise from Tk 8,250 to Tk 20,000 and the maximum from Tk 78,000 to Tk 160,000, according to a statement from the CA’s Press Wing.
Zakir said implementing the proposals would require an additional Tk 1.06 lakh crore annually. Currently, the government spends Tk 1.31 lakh crore a year for its 14 lakh employees and nine lakh pensioners, the press statement said.
Explaining the rationale, Zakir said the new pay structure was prepared after reviewing significant changes in “nearly all global and national economic indicators, particularly the sharp rise in the prices of essential commodities over the past decade.”
“Without a timely and appropriate pay structure, it has become increasingly difficult for government employees to manage living expenses,” he added.
The Eighth National Pay Scale was implemented in 2015.
Zakir said the commission held 184 meetings and gathered opinions and proposals from 2,552 individuals before finalising the recommendations.
During the submission, Finance Adviser Salehuddin Ahmed said a committee would be formed to work on the implementation process.
Speaking to The Daily Star, he said, “The recommendations will be implemented as soon as possible.”
He added that there are certain procedures involved and he was not sure whether the new pay scale would be effective during the interim government’s tenure.
“We have only a few more weeks. However, we have kept provisions in the budget and also partially in the revised budget. So, there is nothing to worry about,” he said.
Expressing satisfaction over the commission’s work, Prof Yunus said, “This is a monumental task. People have been waiting for this for a long time. From the outline, I can see it is a very creative piece of work.”
Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said the additional burden would be “huge”.
He told this newspaper, “The additional expenditure is one-fourth of the revenue earnings. I’m not sure whether the state has the capacity to finance this huge additional amount. You can’t finance salaries by borrowing money.
“Even if the recommendations are implemented in a staggered way, it would require Tk 30,000 crore to Tk 40,000 crore. That is also a very large amount.”
Zahid also said pay commissions usually argue that higher salaries would curb corruption. “But from our past experience, we have not seen a change,” he said.
Prof Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, said the recommendations are in line with inflation and nominal GDP growth since the last pay commission, but should be implemented in phases due to revenue constraints.
“To make the pay hike sustainable, leakage in government expenditure has to be reduced and revenue collection must be increased. Otherwise, the government will have to take loans to pay salaries,” he said.
Salehuddin, however, argued, “Since it will be implemented in phases, it will not put pressure on the budget.”
He said the interim government has taken steps to increase revenue collection and that the next government would know how to expand it further. “So, we should not be concerned about it,” he said.
According to sources, the commission also recommended increasing the Pahela Baishakh allowance from 20 percent to 50 percent.
The proposals include major revisions to pension benefits. Sources said pensioners receiving less than Tk 20,000 per month would see their pensions nearly doubled, those receiving between Tk 20,000 and Tk 40,000 would get a 75 percent increase, and those drawing more than Tk 40,000 would receive a 55 percent hike.
The Ninth National Pay Commission’s recommendations include introducing health insurance for government employees, reforming the pension system, and restructuring the government employees’ welfare board.
The commission also proposed an allowance of Tk 2,000 per month for an employee with a child with disabilities.
In addition, it recommended increasing the tiffin allowance from Tk 200 to Tk 1,000 per month for employees in grades 11 to 20.
