The interim government on Thursday appointed a committee to find out ways to provide dearness allowance to the public employees amid the serious resource constraints left behind by the now ousted Awami League regime.
The Finance Division has appointed the seven-member committee headed by principle secretary to the chief adviser Muhammad Yunus following directives by finance adviser Salehuddin Ahmed.
The committee, having power to co-opt additional members, has been asked to give suggestions regarding the applicability and availability of dearness allowance, according to the directive.聽
The directive, however, did not specify any deadline to come up with the suggestions.
Former World Bank Dhaka office chief economist Zahid Hussain observes that the severe financial constraints amid poor revenue generation leave no scope for the interim government to incur extra costs in the current budget.
An allocation of Tk 81,510 crore has been earmarked in the current operating budget worth Tk 4,90,936 crore for the maintenance of salary and allowance of officers and employees, according to the budget document.
The pressure on fiscal management deepening since April 2022 would continue in the next year, said Zahid Hussain, surprised at the move.聽
The interim government has planned to slash more than Tk 50,000 crore from the annual development budget to reduce pressure on bank borrowing.
The interim government that has replaced the Awami regime on August 8 has already sought extra funds from the International Monetary Fund, World Bank and Asian Development Bank to meet the budget deficit complicated by the poor revenue generation.
The revenue board trailed the revenue collection target by Tk 30,767 crore in the first four months of the current FY2024鈥�25.
The finance division officials called the formation of the committee as the sequel to the years of demonstrations by the joint council of Secretariat officials and employees pressing for their 9-point demand that had recently heightened.聽聽
The 9-point demand include forming a National Pay Commission, reducing the number of pay grades from 20 to 10, implementing 50 per cent dearness allowance before rolling out the full Pay Commission.
On December 1, the joint council called off a scheduled grand rally inside the Secretariat on December 4 following intervention by senior secretaries of the establishment and land ministries.
Centre for Policy Dialogue executive director Fahmida Khatun said that it was too early to say whether the appointment of the committee would lead to salary hike of the public employees amid the prolonged resource crunches and falling revenue incomes.
It might be a routine exercise, she said, adding that they would wait for the recommendations of the committee.
In 2015, the government introduced the latest pay scale for government employees, almost doubling their salaries.
The employees also receive a 5 per cent increment of their basic salary every year.
The recently released 鈥榃hite Paper on the state of Bangladesh economy鈥� described the pay hike in 2015 was intended to appease the bureaucracy that aided the government in rigging the 2014 election.
Given the low tax-GDP ratio, and due to heavy public debt, interest payments on loan have surged since 2017鈥�18 and it surpassed even the amount of salaries and allowances of the government, added the paper in its 鈥楥hapter VII on Public Investment: The Roots of Corruption.鈥�