Up to 20% dearness allowance approved for govt employees

The interim government has approved a dearness allowance (DA) increase, granting 15% for government employees in grades 1 to 9, and 20% for those in grades 10 to 20, effective from July 1.

Finance Adviser Salehuddin Ahmed confirmed the DA hike was under active consideration ahead of presenting the FY2025-26 budget of Tk7,89,999 crore on June 2.

Since 2015, government employees have received an annual 5% salary increment. Additionally, ahead of the last national election, the Awami League government introduced a 5% special incentive alongside the regular increment starting July 2023.

With the new DA in place, the 5% special incentive introduced in FY2023-24 will be discontinued.

A finance ministry official estimated that the DA increase will raise government expenditure by nearly Tk7,000 crore. Budget allocations for salaries and allowances typically grow 6%-8% annually, with the FY26 allocation projected at around Tk89,500 crore. Including the new DA, total expenses could reach up to Tk96,000 crore.