The government is preparing a significant overhaul of the proposed ninth national pay structure for public sector employees, with plans to substantially increase basic salaries while simultaneously revising and, in some cases, reducing several existing allowances. The move is aimed at maintaining fiscal balance and ensuring more effective control over public expenditure amid rising budgetary pressures.
A high-level meeting chaired by Cabinet Secretary Nasmul Gani was held on Wednesday at the Secretariat, where members of the reconstituted committee discussed the draft outline of the new pay structure in detail. The session focused on potential financial implications, implementation strategies, and the broader objective of modernising public sector remuneration. Officials indicated that preparatory work is being advanced with the intention of introducing the revised structure from 1 July.
According to sources within the Ministry of Finance, while a rise in basic pay is under active consideration, retaining current allowance rates alongside increased salaries could significantly escalate government spending. As a result, proposals have emerged to rationalise several allowances to keep overall expenditure within manageable limits.
One of the key areas under review is the house rent allowance. At present, this allowance is provided as a proportion of basic salary and varies by region. With the anticipated increase in basic pay, maintaining the existing percentage structure could lead to a sharp rise in total payouts. Consequently, officials are examining options to reset the rate at a more sustainable level.
Changes are also being discussed in relation to medical allowances. At present, civil servants receive a fixed monthly amount for healthcare needs. Under the proposed framework, this benefit may be restructured, potentially introducing caps or revised eligibility limits.
The education allowance, currently provided for up to two children, is also under review. Policymakers are considering whether to introduce an upper ceiling or modify the structure to ensure better targeting of benefits.
Transport allowances are similarly expected to undergo revision. Discussions include reassessing entitlements across different grades of employees as well as reviewing official vehicle provisions for senior officials, with the aim of aligning benefits more closely with administrative necessity and efficiency.
In addition, several smaller or less frequently utilised allowances are being considered for abolition altogether as part of a broader effort to streamline the pay system.
Speaking at the meeting, Cabinet Secretary Nasmul Gani emphasised that improving the living standards of government employees remains a priority. However, he also stressed that enhancing administrative transparency, accountability and service delivery is equally important. He noted that the ultimate goal of the reform should be to make public services more accessible, efficient and citizen-focused.
Officials familiar with the discussions added that preparations are being made to allocate a substantial budget in the upcoming fiscal year to support the proposed changes. However, they clarified that final decisions on allowances and pay adjustments will only be confirmed following formal government approval.