Daily Advisor

Situation The 10-member review committee headed by Cabinet Secretary Nasimul Ghani has finalized and signed its report recommending a basic salary increase of up to 100 percent for civil service employees across Grades 1 to 20 [Prothom Alo English, Aug 17, 2026]. Prime Minister's Principal Secretary ABM Abdus Sattar confirmed that the 9th National Pay Scale proposal has reached the final stage and could be announced at any moment [bdnews24 & Dhaka Tribune, Aug 16, 2026]. The decision lands while inflation has hovered around 9 percent over the past four years and an 11 to 12 year gap has passed since the 8th Pay Scale was implemented in 2015 [bdnews24 & Dhaka Tribune, Aug 16, 2026]. The immediate policy problem is not whether to raise pay, but how to sequence the first-year basic salary increase against the second-year allowance adjustment so that the recurring fiscal commitment is controlled before it is announced.

Evidence The Pay Commission proposed retaining 20 salary grades, raising the minimum basic salary at Grade 20 from Tk 8,250 to Tk 20,000, raising the maximum basic salary at Grade 1 from Tk 78,000 to Tk 160,000, and narrowing the disparity ratio from 1:9.4 to 1:8 [Prothom Alo, bdnews24, and The Business Standard, Jan 21 to 22, 2026]. The review committee proposed a two-phase implementation: the revised basic salary increase would take effect in the first year, while house rent and other allowances would be adjusted in the second year [Prothom Alo English, Aug 17, 2026]. Full implementation of the recommendations is estimated to require an additional Tk 1.06 trillion (Tk 1,06,000 crore) annually [bdnews24, Aug 16, 2026]. The government currently spends approximately Tk 1.31 trillion (Tk 1,31,000 crore) annually on salaries and pensions for about 1.4 million active employees and 900,000 pensioners [bdnews24 & The Daily Star, July to August 2026]. In the budget placed on June 11, 2026, the government earmarked Tk 898.36 billion (Tk 89,836 crore) for salaries and allowances, with previous planning earmarking Tk 44,000 crore specifically for first-phase basic salary adjustments [Prothom Alo, Aug 17, 2026; The Daily Star, July 7, 2026].

Prescription

1. Ministry of Finance: Before any announcement, issue a phased implementation order that releases only the first-year revised basic salary increase and defers house rent and other allowances to the second year, consistent with the committee's two-phase recommendation [Prothom Alo English, Aug 17, 2026]. Mechanism: a cash release order that treats the Tk 44,000 crore first-phase basic salary adjustment earmark as the ceiling and does not open allowance heads in year one [The Daily Star, July 7, 2026; Prothom Alo, Aug 17, 2026].
2. Ministry of Finance and Cabinet Division: Require a payroll-based verification of actual basic pay outturn against the Tk 44,000 crore first-phase earmark before any second-year allowance decision is scheduled [The Daily Star, July 7, 2026]. Mechanism: monthly payroll reconciliation from the Controller General of Accounts and a variance report submitted to the Cabinet Division as a condition for allowance approval.
3. Cabinet Division: Make the second-year house rent and allowance adjustment contingent on a published fiscal risk statement that identifies how much of the full additional Tk 1.06 trillion annual cost would become recurring if the allowance phase is approved [bdnews24, Aug 16, 2026]. Mechanism: Cabinet approval gated by a fiscal risk disclosure before any allowance circular is issued.
4. Bangladesh Bank: Incorporate the first-year basic pay increase into its inflation assessment, given that inflation has hovered around 9 percent over the past four years [bdnews24 & Dhaka Tribune, Aug 16, 2026]. Mechanism: a monetary policy review note that states the demand-side implications of the pay adjustment and warns against a second-year allowance expansion without a matching fiscal offset.
5. Ministry of Public Administration: Issue a pay fixation circular that locks the proposed 20 grade structure, the Grade 20 minimum basic salary of Tk 20,000, the Grade 1 maximum basic salary of Tk 160,000, and the narrowed disparity ratio of 1:8 into the first phase [Prothom Alo, bdnews24, and The Business Standard, Jan 21 to 22, 2026]. Mechanism: service rules that prevent ad hoc grade reclassification from expanding the pay bill outside the approved scale.

Risks and tradeoffs The main fiscal risk is that the first-phase basic salary increase consumes the Tk 44,000 crore earmark without leaving room for growth in the broader salary and allowances budget of Tk 898.36 billion (Tk 89,836 crore) placed in the budget on June 11, 2026 [The Daily Star, July 7, 2026; Prothom Alo, Aug 17, 2026]. The current salary and pension base is already approximately Tk 1.31 trillion annually for about 1.4 million active employees and 900,000 pensioners [bdnews24 & The Daily Star, July to August 2026], and full implementation would add Tk 1.06 trillion annually [bdnews24, Aug 16, 2026]. Delaying allowances may weaken real income recovery for employees while inflation has hovered around 9 percent over the past four years [bdnews24 & Dhaka Tribune, Aug 16, 2026], but moving allowances too early would convert a large discretionary cost into a permanent recurring liability. The binding constraint is fiscal and expenditure headroom, not the absence of a pay recommendation.

Bottom line Approve the signed 9th Pay Scale recommendation as a phased basic pay correction, but hold house rent and other allowances to the second year until the first-year basic salary outturn is verified against the Tk 44,000 crore earmark [The Daily Star, July 7, 2026; Prothom Alo, Aug 17, 2026]. That sequencing is necessary to prevent the estimated full annual cost of Tk 1.06 trillion [bdnews24, Aug 16, 2026] from hitting a salary and pension base already around Tk 1.31 trillion [bdnews24 & The Daily Star, July to August 2026] without an offset.