Deputy Minister offers clarification on public sector salary hike

The Deputy Minister of Labour Mahinda Jayasinghe today provided a clarification with regard to the process of salary increments to the public sector employees scheduled to be implemented as per the 2025 Budget proposals.

Speaking during the second reading debate of the 2025 Budget in the Parliament today (18), the Deputy Minister expressed that certain individuals are misleading the public regarding the increase in government employees’ salaries.

Accordingly, Jayasinghe explained that the salaries of the employees in the lowest level of the public service, PL 1, will receive an increment of Rs. 5,975.

While explaining the process of salary increments to Grama Niladharis and doctors, the Deputy Minister said that Rs. 7,500 from the gross salary increase will be deducted and 30% of the remaining amount will be added to the basic salary of all government employees from April 01.

“We have not hidden when the basic salary increases by Rs. 15,750. We have said it. Currently, two types of allowances are given to public servants. One is the Cost of Living allowance of Rs. 17,800 and two other allowances of Rs. 7,500 which were increased in the past - Rs. 5,000 and Rs. 2,500. Here, this Rs. 7,500 is included into that salary increase of Rs. 15,750.

When the basic is increased by Rs. 15,750, there is Rs. 7,500 and the new part. Harsha de Silva mentioned only this PL 1 salary. He did not talk about other salaries.

Therefore, Rs. 5,000 and Rs. 975 of the remaining Rs. 3,250 will increase this year. Then, the minimum salary of the PL 1 category in the public service will increase by Rs. 5,975.

Also, the annual salary increment of everyone in the public service will increase by 80%. The minimum annual salary increment of Rs. 250 will increase by 80% up to Rs. 450. Similarly, salaries in other categories will also increase.

The current salary of the Grama Niladhari Service GN - 1 - Rs. 28,940 will become 56,630 within three years. Also, do not forget that the Cost of Living allowance of Rs. 17,500 will be added to the basic of Rs. 40,000 in the same way. Then the gross increase will be Rs. 21,690. When Rs. 17,500 is removed from there, the net increase will be Rs. 14,190. That means that the salary of a Grama Niladhari today will increase by Rs. 9,257.

At the moment, the salary of a doctor (MO) joining the medical service is Rs. 54,290. It increases the basic to Rs. 91,750. Then, if his gross increase is Rs. 37,460 and Rs. 7,500 are subtracted, it will be 30% of Rs. 29,960. All government employees will receive 30% of the remaining 30% after deducting Rs. 7,500 from the gross increase from April 1 of this year. Then, the salary of a doctor will increase by Rs. 13,988.

Now, the hourly rate is Rs. 687. With this new salary increase, the OT for a newly joining medical officer will be Rs. 764 per hour.”

These salary adjustments are expected to be implemented from April 1, 2025 benefiting all government employees with structured increments based on their respective salary scales.

The President’s remarks regarding the public sector salary increments during yesterday’s Budget Speech is as follows;

Public Service Salary Increase

Given that nearly a decade has passed since the last basic salary revision, it is now time to revise the salary structure having evaluated all factors in a holistic manner. It is necessary to provide a decent living standard for public sector employees, enabling the Government to attract talent and skilled workers, whilst at the same time avoiding an excessive burden on the budget. 

Accordingly, we propose to increase the minimum monthly basic salary from Rs.24,250 to Rs.40,000 by Rs.15,750. The current ad-hoc interim allowance and special allowance will be integrated into the basic salary giving a net increase of Rs.8,250 in the minimum salary.

The proposed minimum monthly basic salary increase of Rs. 15,750 will also be applicable to judicial services, public corporations, statutory boards, university staff, and officers of tri-forces on the same basis in line with the minimum basic salary increase for public sector employees.

In addition to a minimum monthly basic salary increase of Rs.15,750, it is proposed to raise the value of the annual salary increment by 80 percent. 

Consequently, the minimum annual salary increment of Rs. 250 will be increased to Rs. 450. It is also proposed to adjust annual salary increments for all public sector employees to the same percentage.

The total estimated cost of this salary increase is expected to be Rs.325 billion. Considering present fiscal constraints, it is proposed that this salary increase be implemented in phases. Of the total net salary increase, Rs.5,000 and 30 percent of the balance amount will be paid starting from April 2025, with the remaining 70 percent being paid in equal portions beginning in January 2026 and January 2027.

Therefore, it is proposed that Rs.110 billion be allocated for the proposed salary increase in 2025. 

As part of this salary increase, it is proposed that the retirement benefits for officers retiring on or after 01.01. 2025be calculated based on the new salary structure, ensuring that they receive retirement benefits under the proposed 2025 salary scheme.

Considering the increase in the minimum basic salary of state employees, the limit on distress loans for public servants which is currently set at Rs. 250,000 will also be increased to Rs. 400,000. Further details of the salary increase are given in the Technical Note in Annexure V.