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President Mahinda Rajapaksa, who is also finance minister, told parliament he plans to increase allowances given to public servants by 1,500 rupees a month from next year.
A cost-of-living allowance of 750 rupees a month will be paid from January 2013 to all public servants, he said.
The balance will be given in stages through a five percent raise in the basic pay with a minimum of 750 rupees and a maximum of 2,500 rupees as an additional allowance to all public servants.
To contain "inflationary pressure" stemming from such increases, Rajapaksa said he proposed to give half of the planned five percent pay hike from May 2013 and the balance from September 2013.
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All those in "staff" categories will be given 50 percent of the pay hike from July 2013 and the balance in October 2013.
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Rajapaksa also proposed raising allowances given to judges, university academic staff and doctors and other special categories "within affordable limits" in the budget, with half of the raise bei