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The government is set to place recommendations for a new pay scale for public servants before the Cabinet today, with the proposed salary structure likely to be implemented in four phases over two financial years.
The Finance Ministry is expected to present the recommendations for approval at the Cabinet meeting this afternoon, following discussions at the highest level of the government.
Under the proposed implementation strategy, government employees would receive increases in their basic salaries in phases, followed by adjustments to house rent and other allowances. The government is considering the phased approach primarily to manage the additional financial burden while meeting the expectations of public servants amid the economic pressures created by the ongoing war.
The additional expenditure is expected to be met largely through increased mobilisation of domestic resources rather than relying on external financing.
The government is finalising the new pay structure while retaining the existing 20-grade system. However, public employees have argued that the number of grades should be reduced to address disparities and ensure a more equitable salary structure.
If the proposal receives Cabinet approval, the government could issue a gazette notification by the middle of September, according to officials familiar with the process.
More than 2 million people, including serving government employees and pensioners, are expected to benefit from the new pay structure.
According to the proposal of the committee of secretaries, the new pay scale would take effect from 1 July of the current financial year, with the basic salary being increased in stages. House rent and other allowances would be implemented from 1 July of the following financial year.
Under the proposed plan, 30 per cent of the revised basic salary would be implemented retrospectively from 1 July this year. A further 35 per cent of the basic salary would then be implemented from the beginning of the next phase.
The remaining portion of the revised basic salary would be introduced from July of the next financial year, while the revised allowances would be implemented in January of that financial year.
In effect, the government is considering implementing the new salary structure in four instalments over two financial years.
Officials said the phased approach is intended to balance the need to increase public servants’ salaries with the government’s fiscal constraints. Rather than imposing the full additional expenditure on the national budget at once, the government plans to spread the financial impact across multiple budget periods.
The recommendations placed before the Cabinet will determine the final structure, implementation dates and financial implications of the new pay scale. Further changes could also be made to the proposal before its final approval.
The proposed pay revision is expected to affect not only serving government employees but also pensioners, as changes in the pay structure generally have implications for pension payments and other retirement benefits.