admin
The government is actively considering the introduction of a dearness allowance for public sector employees in the upcoming fiscal year (FY2025–26), Finance Adviser Dr Salehuddin Ahmed confirmed on Tuesday.
He made the remarks while speaking to reporters following a meeting of the Cabinet Committee on Public Procurement at the Secretariat.
Dr Salehuddin stated, “A committee is currently reviewing the proposal, and the matter is receiving special consideration.”
According to senior officials at the Finance Division, the allowance—aimed at cushioning the impact of high inflation—is likely to be incorporated into the FY26 national budget.
The allowance could be as high as 20%, depending on employees’ pay grades.
Under current discussions, civil servants in grades 10 to 20 may receive a 20% dearness allowance, while those in grades 1 to 9 could be granted an increase of 10% to 15%. Preparatory work on the proposal is already underway.
If approved, this would replace the existing 5% special incentive introduced under the previous Sheikh Hasina administration. The shift is expected to incur an additional expenditure of approximately Tk 7,000 crore on the government’s annual salary and allowance budget.
The move follows continued inflationary pressure on the economy and comes in the wake of the fall of the previous government. In December 2024, the Interim Government established a committee to explore mechanisms to ease the financial burden on civil servants through revised compensation.
Finance Division insiders note that the allowance would act as a temporary relief against the rising cost of living until broader salary reforms can be enacted.
As the government prepares to unveil the FY26 budget, the proposed dearness allowance is expected to be a central feature in addressing public sector wage stagnation and maintaining administrative morale amid economic uncertainty.
