Special incentive for public servants raised to 15% from July

The government has issued a circular approving a special incentive increase for public employees to 15 per cent from the current 5 per cent, effective July. 

This follows the Tk 789,999 crore FY26 budget proposal announced on Monday.

Key details:

Grades 10–20: Total 15 per cent incentive (additional 10 per cent).

Grades 1–9: Total 10 per cent incentive (additional 5 per cent).

Estimated Cost: Tk 7,000 crore.

Budget Allocation for FY26: Tk 84,114 crore for salaries and allowances, up from Tk 81,580 crore (original) and Tk 79,247 crore (revised) in the current fiscal year.

Background:

In 2023, a 5 per cent special incentive was introduced alongside the annual 5 per cent increment to address inflation.

Finance Adviser Salehuddin Ahmed noted the unchanged pay structure since 2015 as a reason for the increase.

Approximately 50,000 employees are expected to retire next year, increasing pensioners to 8.5 lakh.

The salary and allowance allocation has not risen proportionally despite higher pension costs and incentives.