Govt earmarks Tk 89,380cr for public servants’ pay, allowances in FY2026-27 budget

The government has proposed an allocation of Tk 89,380 crore for salaries and allowances of public sector employees in the national budget for fiscal year 2026-27, which is set to be placed in Parliament on Thursday (June 11).

Although a revised pay structure for government employees is under consideration, no separate allocation has been earmarked specifically for its implementation in the proposed budget.

According to budget documents, Tk 13,874 crore has been allocated for the salaries of cadre officers, while Tk 30,671 crore has been proposed for non-cadre employees. A further Tk 44,835 crore has been earmarked for various allowances payable to government officials and employees.

The proposed allocation marks an increase from the current fiscal year. In the FY2025-26 original budget, Tk 84,114 crore was allocated for salaries and allowances, which was later revised upward to Tk 84,739 crore. As a result, the upcoming budget raises the allocation for the sector by nearly Tk 4,600 crore.

Officials at the Ministry of Finance said the government is planning to introduce a new pay structure from the beginning of the next fiscal year, either partially or by implementing a portion of the proposed salary adjustments. However, the recommendations made by the pay commission formed during the interim administration are unlikely to be adopted in full.

To review the commission’s proposals, the government has already formed a committee of secretaries. The committee is currently examining the recommendations and has yet to submit its final report.

Sources familiar with the process said the committee may recommend a moderated salary increase after reassessing the proposed pay scales, aiming to balance employee welfare with fiscal sustainability.

Despite the absence of a dedicated allocation, finance ministry officials expressed confidence that funding constraints would not hinder the rollout of the revised pay structure from July. They said the government plans to finance the initiative through block allocations and contingency funds kept in the budget.

According to ministry sources, around Tk 37,000 crore has been set aside under various block and special allocations, providing sufficient fiscal space to support any salary adjustments approved during the fiscal year.