Govt yet to decide on dearness allowance: Salehuddin

The government has not yet made a decision regarding the dearness allowance for government officials and employees, said Finance Adviser Salehuddin Ahmed on Tuesday.

When asked if the government is moving away from the dearness allowance issue, he responded, "Who made the announcement regarding the dearness allowance? I don’t know who made the announcement. Once it comes to the Ministry of Finance, we will decide whether we will give it, how much we will give, and then we will make an announcement."

He made these remarks after a meeting of the Advisory Council Committee on Government Procurement at the Secretariat on Tuesday (January 28).

When journalists inquired whether any proposal had been sent to the Ministry of Finance, the Finance Adviser replied, "We haven’t made any announcement yet. We have not made any decision yet."

The Finance Ministry recently prepared a draft proposal to provide a dearness allowance ranging from a minimum of 10% to a maximum of 20% of the basic salary for 14.50 lakh government employees. However, a recommendation was also made to exclude the additional 5% annual increment for government employees. According to the Finance Ministry, implementing this proposal would incur an additional cost of at least Tk 5,000 crore in a single fiscal year.

In the draft proposal of the Finance Department, there is a plan to reduce expenses by providing a maximum of 20% allowance for employees in grades 11 to 20, while employees in grades 1 to 10 were being discussed to receive an allowance at a rate of 10% or 15%.

In this case, if a 10% allowance was given to employees in grades 1 to 10, it would require slightly more than Tk 5,000 crore. If the allowance were raised to 15%, the expenditure would increase to nearly Tk 5,750 crore. The Finance Department proposed allocating this amount in the revised budget.

However, since the government initiated this measure, there has been criticism from various quarters. Analysts have pointed out that instability has been prevalent in the overall economy, including foreign currency reserves, for several years. Additionally, due to a political shift in July-August, the government's revenue collection has drastically declined. In the first six months of the current 2024-25 fiscal year, revenue collection was nearly Tk 58,000 crore lower than the target.