The interim government is frequently raising allowances and incentives for the public officials despite a fund crisis and high inflation prevailing in the country.
On July 27, the government also formed the National Pay Commission 2025 for hikes in pay for about 18 lakh public officials and employees.
Economists warned that the government would face an imbalance in fiscal management due to a rise in expenditure amid the hikes in benefits and pay against a shortfall in the revenue collection.
Amid the financial stress, the government is also facing growing pressure from different ministries and divisions for a further rise in allowances and incentives, said officials.
Over the past one and a half months, the Finance Division has implemented at least three demands linked to the rise in allowances and incentives enjoyed by the government officials.
The recent upward revisions of allowances would cost the government additional Tk聽7,000 crore annually while the Finance Division鈥檚 regulation wing is now under pressure to entertain many such demands.
Led by former finance secretary Zakir Ahmed Khan, the National Pay Commission has been asked to submit recommendations on pay hikes within six months.
鈥楾he forthcoming pay hike for public officials and employees over the next six months will fan inflation,鈥� said former World Bank Dhaka office chief economist Zahid Hussain.
The average inflation between August 2024 and July 2025 hovered at 9.77 per cent.
The National Board of Revenue faced a record revenue collection shortfall of Tk聽92,625 crore in the past financial year of 2024-25. It collected Tk聽3.70 lakh crore in the financial year.
The latest increase in allowances for trainees and trainers under the government programme was made on August 14. Due to the increase, joint secretaries and above will receive Tk聽3,600 an hour for conducting a class, while deputy secretaries and lower-level officials will get Tk聽3,000 an hour.
Previously, these rates were Tk聽2,500 and Tk聽2,000 respectively.
Trainee allowances have also been doubled to Tk聽1,200 daily for employees of the grade-10 and below.
Almost a fortnight ago, the government revised up聽 the risk allowance for field-level police personnel by maximum 20 per cent and minimum 5 per cent.
The risk allowance for a constable who is yet to complete five years in service has been increased to Tk聽1,800 from Tk聽1,500.
Similarly, the risk allowances for nayek, assistant sub-inspector, sub-inspector, sergeant and traffic sergeant/inspector have been revised based on their job duration.
The upward revision in risk allowances for the police personnel would cost the government Tk聽100 crore annually.
Officials said that demands for increasing the risk allowances for officials and employees of the Bangladesh Ansar, Village Defence Party and Bangladesh Fire Service and Civil Defence had remained pending with the Finance Division.
Since July, the officers and employees in the grades 10 to 20 have been receiving 15 per cent special incentive instead of previous 5 per cent with monthly salary.
The rate is 10 per cent in for the grades 1 to 9.
The move is expected to cost the government about Tk聽7,000 crore annually.
Expressing worries, economists said that the upward revision of allowances and the proposed pay hikes for the government officials and employees would increase money supply on the market.
The majority of people outside the public pay scales would face problems, including financial hardship, they said.
Besides, the traditional practice of raising prices of essentials and house rent using the public pay hike as a pretext would put the private sector employees into further distress, said the economists.
Centre for Policy Dialogue executive director Fahmida Khatun said that the government had failed to ensure salary hikes in the private sector matching with the pay hikes for the public sector over the past years.
In 2015, the public sector salaries saw an almost 100 per cent increase, said the CPD executive director.
The 鈥榃hite Paper on the State of the Bangladesh Economy鈥�, which was submitted to the interim government in past December, criticised the 2015 pay hikes, describing those as an attempt to appease the bureaucracy following the controversial 2014 Jatiya Sangsad elections under the Awami League regime ousted on August 5, 2024, in the wake of a mass uprising.