The government is considering raising pay and allowances of public servants by 25 per cent as part of "price adjustment," officials said.
This includes an annual increment of 5.0 per cent.
The fresh proposal comes after the government offered a string of fringe benefits to the in-service employees and retirees, including home and car loans.
The proposal is at the initial stage and officials concerned are working on it.
Finance Ministry officials said if it progresses accordingly the pay-rise for 1.3 million public servants will be implemented from the 1st of July this year.
The current national pay-scale was announced in December 2015. It was also announced then that the salaries of public servants would be increased proportionately with the inflation rate, abolishing the pay-scale.
In the current pay-scale, the government has raised the salaries in the range of 91 to 101 per cent, which has been implemented in phases.
The public sector employees got the increase in basic pay from July 2015 and other allowances were given from July 2016.
Former Bangladesh Bank governor Dr Mohammad Farashuddin headed the last pay commission formed to propose pay-increase for government employees.
The highest basic pay approved was Tk 78,000 and the minimum was Tk 8,250.
In the current pay-scale, an officer who joins government service after passing the BCS examination gets a basic pay of Tk 22,000 in addition to house rent in accordance with the areas of residence and medical reimbursements. The earlier basic was Tk 11,000.
Although the recommended highest basic pay is Tk 78,000, the cabinet secretary and the principal secretary to the prime minister get a basic of Tk 86,000, while senior secretaries are entitled to Tk 82,000.
The earlier pay was Tk 45,000 and Tk 42,000 respectively.
The government's budget provision for pay and allowances in the current fiscal year is Tk 585.12 billion.
During 2014-15, the provision was Tk 287.09 billion-or less than half of the current allocation, according to budget document.
Business people said if the salaries of government employees rise it will exert pressure on the private sector to reciprocate.
"The pay and allowances in the public sector should be proportionate with that of the private sector," said an entrepreneur.
The latest fringe benefits include housing loans at lower rate of interest and credit for purchasing motorised vehicles.
Officials with the rank and status of deputy secretaries are entitled to such loans. Earlier, only joint secretaries used to get car loans.
The civil servants get car loans of Tk 2.5 million along with driving and maintenance costs of Tk 50,000 a month.
The government also introduced pension facilities from July last for the retirees who had surrendered full pensions at the time of their retirement.
