The process of introducing a revised national pay structure for government employees has officially commenced from 1 July, marking the beginning of a major overhaul in the country’s public sector remuneration system. While the final gazette notification is yet to be issued, early draft proposals indicate significant changes to the existing framework, particularly in the way annual salary increments are determined across different pay grades.
According to sources within the Ministry of Finance, the finalisation of the gazette may still take two to three months as discussions continue among policymakers. The reform process is being treated as a gradual exercise, with adjustments expected before a definitive structure is formally approved.
Under the preliminary draft, a differentiated system of annual increment rates has been proposed in place of the current uniform structure. Employees in grades six to twenty are likely to receive an annual increment equivalent to five per cent of their basic salary. For those in the fifth grade, the proposed rate stands at four per cent. In the third and fourth grades, the increment is set at 3.5 per cent, while the second grade may see a lower rate of 2.75 per cent. The first grade is expected to follow a separately defined mechanism. At present, all grades receive an average annual increment of around five per cent.
Before shaping the new structure, the government conducted an extensive consultation process involving a wide range of stakeholders. Inputs were gathered from 137,500 government employees, 61,500 members of the public, and 3,513 heads of institutions. The feedback reflected diverse expectations regarding fairness, inflation adjustment, and living standards.
Survey findings suggest that only 5.6 per cent of respondents support retaining the existing uniform increment system. A majority of 50.43 per cent favoured adjustments aligned with inflation, while 31.54 per cent supported linking salary revisions directly to the cost of living. Nearly 58 per cent also advocated for higher increment rates for lower-grade employees, highlighting concerns over income disparity and purchasing power.
Alongside changes to basic pay, revisions to allowances have also been proposed. The medical allowance, initially suggested by the National Pay Commission at a higher rate, has been reduced to 3,000 in the current draft. Educational allowances for employees’ children are being set at 1,500 instead of the proposed 2,000.
Officials from the Finance Division indicate that while the core salary structure will undergo substantial revision, some allowances have been moderated compared to the commission’s original recommendations. Even so, the overall package is expected to increase total remuneration levels compared to the existing system.
Government analysis shows that the lowest grade employee currently receives a basic salary of 8,250. Including allowances, total monthly income stands at approximately 16,950. Under the proposed structure, the basic salary could rise to 20,000, with total monthly earnings potentially reaching around 41,908 once revised allowances are factored in.
The reform plan also reflects an attempt to balance equity across different tiers. While lower and mid-level employees may see more significant gains, adjustments in allowance growth for higher grades are expected to remain relatively restrained. Allowances such as travel, risk, washing, and tiffin benefits are already more prominent among lower and mid-tier employees, a factor that has been considered in shaping the new framework.