Proposed salaries to be slashed off a little

The finance ministry plans to cut 10 to 20 percent of the Pay Commission’s recommended scales for 20 grades of government employees.
Sources say the ministry is now looking for ways to cut Tk 2,000-2,500 crore of the commission’s recommended expenditure for paying government employees.
They said the ministry is currently examining what amount of money they will save by slashing 10 to 20 percent of the recommended salaries of each grade.
In 2004, the government increased pay, cutting 14 to 18 percent of the fourth pay commission’s recommended wage structure.
This time the government will need an additional fund between Tk 6,600 crore and Tk 8,400 crore each year to implement the pay hike.
The 13-member Pay Commission headed by former chairman of Revenue Reform Commission Mustafizur Rahman last month recommended salary hike by 82 to 95 percent for grades 1 to 10 and by 66 to 70 percent for grades 11 to 20.
If the government implements the recommendations without amending them, this will push the annual recurring expense to a maximum of Tk 29,063 crore from the current Tk 20,661 crore.
And this is not all; the government’s recurring expenses will increase more as it is expected to implement recommendations of a separate pay commission for the Armed Forces Division. This commission submitted its report to the prime minister recently.
The newly formed Judicial Service Pay Commission has also raised its voice about having a new and enhanced pay structure for the lower court.
The Pay Commission for the administration recommended implementation of the hike in either of two ways.
In scenario one, the commission took into cognisance the pressure from the administration to increase retirement age to 60 from 57 years. If the government increases the retirement age, the expenditure for pension will drop for this year. As a result, the overall expenditure will increase by Tk 6,602 crore to Tk 27,263 crore.
If the retirement age remains unchanged, pension cost will increase by Tk 1,800 crore, resulting in a total expenditure of Tk 29,063 crore.
According to the Pay Commission report, there are 7,61,214 employees in government institutions against 8,79,545 approved posts. The government will need to spend Tk 4,790 crore more for these employees’ annual cost of Tk 17,070 crore.
There are 3,03,220 employees in different autonomous institutions. The pay hike demands Tk 566 crore over their annual cost of Tk 1,986 crore.
There are a total of 5,54,282 education sector employees who draw government pay cheques under Monthly Payment Order (MPO). The pay hike demands Tk 1,902 crore more for their annual cost of Tk 6,051 crore.
There are 4,24,285 pensioners who are drawing Tk 2,811 crore in the current fiscal year. If the Pay Commission recommendations are implemented increasing the retirement age, the next year’s cost will drop to Tk 1,688 crore. But if it goes on as usual, the total cost will increase to Tk 3,488 crore.
The Pay Commission also calculated that Tk 467 crore will be needed for increments to government employees in the next fiscal year.

Courtesy of The Daily Star