A new pay commission is likely to be announced in the upcoming budget session and the revenue budget may have a separate allocation to finance the initiative.

The finance ministry, after days of deliberation on whether to make allocation for dearness allowance for government employees or to announce a pay commission, has in principle agreed on a new pay scale, the source added.

If the government only provides for dearness allowance, the upcoming budget will add more than Tk 1,000 crore to the allocation for government employees' pay and allowances.

The finance ministry has not yet calculated how much it might have to allocate if a new pay scale is announced, sources said. "Before deciding the figure, the ministry is scrutinising whether the new pay scale will be implemented at once or in phases spread over several years."

The last pay scale for government employees was announced in 1997, implemented in phases over three years.

The Public Expenditure Review Commission (Perc) in its December 2003 report stood for a new pay structure. The Centre for Policy Dialogue (CPD), a leading non-government think-tank, also made a similar suggestion. According to the CPD, in the last seven years, the value of income has eroded by about 39.4 percent.

While the government services should pay more, the Perc believed the size of the government should be reduced to make it more efficient and cost effective. It also suggested forming a permanent pay commission.

The Perc found 20 different scales in government service, and observed, "Whatever the nature of the job, one has to accept a certain scale." For instance, an administration officer at the Secretariat gets Tk 3,400 while a police inspector gets the same scale. A typist gets Tk 1,875-scale and a police naik also gets the same scale. Yet the nature of these jobs are very different.

Since independence, five pay scales have been introduced for government employees. The first scale announced in 1973 put the lowest scale at Tk 130 and the highest at Tk 2000, and the latest in 1997 put the lowest at Tk 1,500 and the highest at Tk 15,000.