by Sheikh Mohammad Arif (Dhaka Bureau)
Nearly the entire Tk40,000 crore (about $3.6bn) originally set aside to implement a new pay commission for Bangladesh’s government employees has been redirected to other spending priorities, according to officials at the finance ministry. Most of the funds have been used to cover rising energy subsidies, while the remainder has been shifted to programmes promised in the ruling party’s election manifesto, including farm loan relief and a new social support scheme.
As a result, the implementation of the new pay commission in the 2025-26 fiscal year now appears highly unlikely.
As part of preparations for introducing a new national pay commission, the interim administration had earmarked nearly Tk40,000 crore in the current fiscal year’s budget under the wage and allowance category. However, rapidly changing global conditions- particularly volatility in energy markets triggered by conflict involving Iran- forced the government to revise its spending priorities.
Officials say that the disruption of global energy supply chains and the sharp rise in international oil and gas prices have significantly increased Bangladesh’s import costs. In response, the government has had to expand subsidies to stabilise domestic energy prices.
According to finance ministry figures, around Tk24,000 crore from the pay commission allocation has been diverted to cover additional subsidies in the energy sector during the current fiscal year.
Another Tk15,000 crore has been earmarked to fulfil a major campaign pledge: waiving up to Tk10,000 in bank loan repayments for farmers. Officials say the measure aims to sustain agricultural production and ensure food security at a time of economic uncertainty.
In addition, the government led by Tarique Rahman has introduced a ‘Family Card’ programme designed to provide direct financial assistance to low-income households. Under the scheme, a female member of each eligible family receives Tk2,500 per month in cash support. As a pilot initiative, the government has allocated Tk38.07 crore for the programme.
Taken together, these reallocations have almost entirely exhausted the funds originally reserved for the pay commission. Of the Tk40,000 crore allocation, Tk39,038.07 crore has already been redirected to various sectors, leaving only Tk961.93 crore unspent.
Finance ministry officials say that implementing the new national pay commission under current fiscal conditions would require substantial additional resources that the existing budget framework cannot accommodate.
‘The government had made preliminary preparations for raising public sector salaries,’ said one official. ‘But the present situation does not allow for such a decision. Rising energy import costs and global market volatility have significantly altered our fiscal planning.’
Officials also indicated that the likelihood of a major turnaround within the current fiscal year remains low, as a large portion of the budget has already been committed to urgent spending needs.
Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said the development was not entirely unexpected.
‘Taking such a large financial decision just days before leaving office was not appropriate,’ he said, though he declined to comment in detail due to limited information about the matter.
The diversion of funds has triggered frustration among many government employees. Several officials acknowledged that the country’s economy faces considerable pressure but expressed hope that the government might still introduce at least a partial salary adjustment.
‘We have heard from various sources that the pay commission may not be implemented,’ one official said. ‘Even so, the government could consider implementing part of it. With inflation running high, even a modest salary increase would provide some relief.’
Analysts say the episode highlights a broader challenge in Bangladesh’s fiscal management: budget priorities can shift rapidly under pressure from global developments and domestic political commitments.
With energy security, agricultural support, and social protection programmes now dominating the government’s spending agenda, the proposed pay commission for civil servants has effectively been pushed to the sidelines- for now.
