Government Employee Count Surpasses 55,000, Salary Costs Rise to MVR 13.9 Billion

According to the 2027 budget submitted by the Ministry of Finance to the People’s Majlis, the number of government employees has increased by 6,530 people in the three years since the current government took office. The total number of government employees, which stood at 48,936 at the end of 2023 (the last year of the previous administration), has now risen to 55,466. The rate of employee growth during the first three years of this government has accelerated compared to the preceding three-year period. From 2020 to 2023, a total of 4,808 employees were added, averaging 1,603 per year. In contrast, the current government has added 6,530 employees over three years, an average annual increase of 2,177. Alongside the rise in headcount, salary and allowance expenditure has grown significantly. Excluding pensions, the wage bill was MVR 10.2 billion in 2023, rose to MVR 11.6 billion in 2024, and reached MVR 12.5 billion last year. It is estimated to hit MVR 13.9 billion this year—an increase of MVR 3.7 billion over the three-year period. The budget allocates MVR 14.4 billion for salary expenditures next year, of which MVR 7.9 billion will go to salaries and MVR 6.5 billion to allowances. One-third of the state’s projected income of MVR 43.2 billion next year will be spent on salaries, making it the largest share of operational costs. According to the Ministry of Finance, the main drivers of the increase are the creation of new departments, expanded departmental responsibilities, and changes linked to the Pay Harmonization (salary equalisation) policy launched in 2022. The policy, initiated by the previous government, first increased teachers’ and education sector employees’ salaries, then raised health sector salaries and introduced a 35 percent allowance for all civil service employees. The current government continued the policy, placing teachers on a new pay framework last year and equalising salaries for other education sector workers, civil service, judiciary, and council employees in November. Soldiers’ and police salaries were also raised last year, and a National Service program was launched to add personnel to security services. Due to Pay Harmonisation, pension expenditures are also increasing as retiring employees receive higher benefits. The budget’s fiscal risk section warns that unless employee costs under Pay Harmonisation are controlled, salary expenditures could rise beyond sustainable levels. It also notes that if the rate of employee growth is not slowed, the risk of rising salary costs will increase. The government states that once Pay Harmonisation is fully completed this year, mid-term employee costs will remain at next year’s projected level, and all employees will receive Pay Harmonisation salaries from next year. Measures proposed to control costs include setting a maximum limit for overtime payments, controlling recruitment and work planning, and leveraging digitisation and automation to keep employee growth sustainable. The opposition has criticised the rise in political appointees. The government recently disclosed that there were 922 political appointees as of July last year, but the opposition claims the figure is several thousand. The budget does not clarify this, as the ongoing Pay Harmonisation makes it difficult to attribute rising salary costs to specific causes.