Around 850,000 public servants and armed personnel will also get a Rs. 1000 cost of living allowances (adjusted twice a year in June and Dec.).
"I propose to grant Rs. 1,000 Cost of living allowance and a 50 percent of the difference of present salary and new salary recommended by NCA in 2006 and balance 50 percent in 2007 subject to a minimum pay increase of Rs. 1,300 per month inclusive of COLA in 2006," Finance Minister Sarath Amunugama told parliament during the budget presentation on Tuesday.
"As budget estimates have already provided for the balance increased proposed last year, I need to provide further Rs. 9,600 million for this proposal."
Paid Holidays
Public servants will be able to encash a maximum of 30 days unutilized leave each year. State employees currently enjoy 21 days casual leave and 24 days annual leave.
However, all employees have to take their leave for seven continuous days each year.
A risk insurance scheme will also kick in for those employed in government run health, forest, railways and wildlife conservation departments.
Car permits
Public servants will be offered tax cuts to purchase vehicles of their choice, under a new scheme that will kick in next year.
Pensions
Amunugama also promised some relief to around 450,000 government pensioners, giving them a Rs. 500 cost of living allowance each month.
The interim allowances being paid to the pensioners will also be consolidated and they will get a ten percent increase on their unreduced pension with effect from Jan., 1, 2006 subject to a minimum of Rs. 500 and a maximum of Rs. 1,250 per month.
Employees retiring between Jan. 1, 2004 and Dec. 31, 2005 including the two days will not be entitled to this increase.
"Therefore, pensioners will get a minimum increase of Rs. 1,000 from these changes. An additional allocation of Rs. 4.5 billion is provided."
On a lighter vein, Amunugama said that widows who wish to re-marry will be eligible to receive their 'Widows & Orphan Pensions'.
-LBO Newsdesk: LBOEmail@vanguardlk.com