The government has initiated measures to cut operating expenditures in the coming years, aiming to curb the rising trend witnessed in recent years due to various global and domestic challenges. The operating expenditures are projected to account for 58.7% of public expenditure in the 2025-26 fiscal year and 58.4% in 2026-27, according to an official document from the Ministry of Finance. The government has targeted operating expenditures at 59% of total public expenditure for the current fiscal year. Operating expenditures include wages, salaries paid to the government employees, purchase of goods and services, subsidy and transfer payments, interest paid for domestic and foreign loans and expenditures on 'food account operation'. According to the document, operating expenditures increased from 55.6% in FY19 to a peak of 62.6% in FY23, driven by the twin crises of the COVID-19 pandemic and the Russia-Ukraine war which required significant government spending. Key drivers of increased spending Interest payments have risen steadily, reflecting growing debt servicing obligations. Subsidies and transfer payments have also expanded from 2.9% of public expenditure in FY19 to an estimated 4% in FY24, emphasising social welfare and economic stabilisation measures, said the document. The operating expenditure, spanning from FY19 to FY23, maintained an average of 7.6 percent of GDP. Read: Govt expenditure reduced by Tk 47,367 crore in revised budget of FY2023-24 With the revised budget for FY24, this figure has surged to 8.6 percent. This marginal leap arises from the increase in domestic interest rates and the volatility of exchange rates in the global economy, which together elevate interest payment expenses. Despite these challenges, the government anticipates stabilizing operating expenditure at 8.3% of GDP in the medium term, driven by strategic adjustments and fiscal discipline. The food subsidy has increased by 14.1 % in FY24 compared to the previous FY23, which also contributes to this escalation. Managing Salaries and Goods Expenditures The share of salaries and allowances as a percentage of GDP decreased from 1.8% in FY19 to 1.4% in FY23, not due to salary cuts but reflecting broader economic growth. The share of expenditures on pays and allowances is projected to be 1.5 percent of the GDP by FY25, still lower than the 1.8 percent of FY19. The government is committed to optimising expenditure on pay and allowances while also ensuring efficient public service delivery, the document stated. While the proportion of expenditures on salaries and allowances compared to the GDP has decreased from 1.8 percent in FY19 to 1.4 percent in FY23, this change is not due to a reduction in salary amounts. Read more: CSOs demand public expenditure review commission The share of expenditures on pays and allowances is projected to be 1.5 percent of the GDP by FY25, still lower than the 1.8 percent of FY19, reflecting a broader economic development rather than cuts in salaries. The reallocation of resources to more pressing areas during the COVID-19 years and the austerity measures adopted since 2022 caused the expenditure on goods and services to fall from 7.3 percent in total expenditure in FY19 to 5.9 percent in FY23. The revised estimates of FY24 show that expenditures on goods and services in FY24 were 6.1 percent of total expenditures. The Finance Division has projected that expenditure on goods and services will remain around 6 percent in the medium-term. Rationalising Subsidies and Strengthening Social Support The government is pursuing a strategic approach to rationalise subsidy allocations, prioritizing livelihood support programs for vulnerable populations. Subsidies for agriculture, energy, and power sectors remain a focus amid rising essential costs. Energy subsidies are set for a gradual reduction, supported by systematic price adjustments and the implementation of formula-based fuel pricing mechanisms. However, lingering subsidy arrears from previous fiscal years will require ongoing attention. Promoting growth and sustainability To drive economic growth, the government plans to provide fiscal incentives for export diversification, remittance growth, agricultural development, and the adoption of green technologies in the RMG sector. Emphasis is also given on hybrid technologies, electric vehicles, and ICT service exports. Special attention will continue to be given to agriculture and exports, which are regarded as the backbone of the country’s economy, said the document.

The government has no intention to establish any separate university for the children of bureaucrats at this moment, Public Administration Minister Farhad Hossain has said. “The government is working to ensure equal opportunity for all,” he said while talking to UNB at the secretariat on Sunday (May 05, 2024). “Bureaucrats placed a proposal regarding the establishment of a university for their children and we welcome any kind of proposal. We have many important things to do now and we are not thinking about it at the moment,” he said. Decision to increase age limit for govt jobs up to PM, says Public Administration Minister Divisional and deputy commissioners presented various proposals during the DC conference held from March 3-6. Different proposals including master’s and advanced degree programmes, training for civil service officers, and their children’s education came during the conference, he said. The DCs placed various demands including educational opportunities during their meeting with the prime minister. While talking about the Deputy Commissioners’ proposal, the minister reiterated the inclusive nature of higher education, emphasising that universities are institutions accessible to all where everyone has to get a chance through admission tests. “This is how we think about it.” Power and energy sector likely to get Tk 804 billion allocation in next two fiscal years The minister said, there is a government employee hospital for government employees, "The university is  universal, it comes from a universal idea." "A university is an open space where knowledge is freely acquired, and people can think without constraints. It's where minds develop, shaping individuals into capable citizens. It's a hub for all kinds of people, a place where genius thrives," the minister concluded.  

The government has no plan to announce new pay scale or dearness allowance for the government employees right now, Finance Minister AHM Mustafa Kamal said in Parliament on Tuesday. The minister said this in reply to a tabled question from Gonoforum MP Mokabbir Khan. Read more: Primary school headmasters to get grade 10 pay scale: SC The finance minister said that the government issued the National Pay Scale Order in 2015, which is still in force. In the past, government employees were given the benefit of salary increment every year as per the pay scale order.  But, due to the provision of increase in percentage of the basic pay in the National Pay Scale 2015, the annual salary of the government employee increase at a fixed rate up to a certain limit, which has been playing a positive role in improving the standard of living of the government employees at all levels, the minister said.  “Amid the post-Covid global recession, inflation has increased around the globe  with hike in commodity prices, which has also affected Bangladesh.The government has taken various steps to control inflation and normalize the market situation.” Read more: Govt employees demand amending 8th pay scale The finance minister said that in the current situation, the government has launched a programme to provide daily essentials through family cards at a lower price. The government is trying to take practical steps to increase the financial capacity of  people. “In this situation, there is no plan to announce new pay scale or dearness allowance for the government employees at this moment,” Kamal said.