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Download PDF The government is going to increase the salaries of its employees by around 20 percent in the next fiscal year considering the price hike of essentials.
It will also raise the funds for the safety net programmes for the poor to Tk 9,000 crore. The revised budget of the current fiscal year allocated around Tk 4,000 for this purpose.
However, officials said it is not yet certain whether the increase will be on the gross or the basic salary of the public servants.
“The preliminary estimation shows that the government will have to spend Tk 3,210 crore in addition to its current spending in the next budget for increased salaries of public sector employees,” a finance ministry official told The Daily Star.
The current budget has allocated Tk 13,510 crore for the pay and allowances of government employees.
The plan to increase the salaries of the government employees can be seen as a result of the recent hike in prices of food and other commodities, which has subsequently raised the overall living expenses.
The expansion of the safety net programme funds will be to the tune of around 1 percent of the GDP (gross domestic product) compared to the last budget.
The government hopes the expansion will secure new employment to 20 lakh poor people, who will receive cash payments for undertaking local public work projects.
In a recent meeting with the Better Business Forum delegation, the policymakers said that the government is working towards creating work opportunities for poor people for at least nine months in a year.
The next budget may allocate Tk 2,000 crore for this purpose, sources said.
Turning to the safety net programmes, the finance ministry sources said the size of existing programmes like Food For Work (FFW), Vulnerable Group Feeding (VGF), Vulnerable Group Development (VGD), Test Relief (TR) and Open Market Sales (OMS) will be expanded in the next fiscal year, so that more people can be benefited.
The government will allocate around 24 lakh metric tons of rice against the safety net programmes, which is 16 lakh metric tons in the current fiscal year, they said.
Following a demand of introducing food rationing, the food ministry conducted a study recently and came up with suggestion that such a system may create room for corruption.
“We are not considering introduction of food rationing as there could be leakages in the distribution channels,” a source said.
Meanwhile, the government apprised the IMF mission of its next fiscal budgetary allocations during the latter’s visit to Bangladesh from April 22-27. The mission was led by IMF Asia Pacific Adviser Thomas Rumbaugh.
The IMF delegation supported the government plan to expand safety net programmes and to increase the salaries of government employees.
It, however, suggested the government carefully consider the increases in public sector pay, as these are less targeted to social safety needs and could contribute to inflationary pressures.
The mission told the government that additional work is needed to improve the targeting of safety net programmes and subsidy policies and minimise leakages, which could be substantial.
The IMF team observed that losses of state-owned-enterprises (SoE) have increased due to delayed price adjustments of fuel and fertiliser.
Total losses from SoE in FY08 are estimated at about Tk 14,000 crore. Of this, Tk 9,500 crore will be provided from the current budget.
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