In a significant move aimed at providing financial relief to public sector employees and retirees, the federal government has proposed a 10% increase in the salary of government employees and a 7% hike in pensions in the Budget for the fiscal year 2025-26.
Presenting the budget in the National Assembly on Tuesday, Minister for Finance and Revenue, Senator Mohammad Aurangzeb, stated that the government, despite facing serious fiscal challenges, had prioritized the well-being of its workforce. The salary increase will apply to all federal government employees from Grade 1 to 22, reflecting the administration’s intention to help civil servants cope with rising living costs and maintain their purchasing power.
Highlighting the government’s continued commitment to social welfare, Senator Aurangzeb also announced a 7% increase in pensions for retired federal employees. This measure is designed to assist pensioners in meeting their daily needs in the face of inflation. The Finance Minister emphasized that these pension enhancements are part of broader efforts to protect the financially vulnerable segments of society, particularly older people who rely on fixed post-retirement incomes.
In a notable measure for disabled individuals employed by the government, the special conveyance allowance is being raised from Rs 4,000 to Rs 6,000. Furthermore, to minimize inequalities across departments, a 30% disparity reduction allowance has been proposed for eligible employees. This is expected to narrow the gap between various public sector departments in terms of compensation.
In addition to the regular salary increase, a special relief allowance has also been proposed for the officers, soldiers, and Junior Commissioned Officers (JCOs) of the armed forces, ensuring that military personnel are also supported in these difficult economic times.
The Finance Minister reiterated that while fiscal space remains tight, the government remains committed to enhancing the financial security of its employees and retirees. Both salary and pension adjustments are integral components of this year’s budget, ensuring support for current employees and honoring the services of retired ones. The dual focus on salary and pension increases underlines the administration’s aim to balance fiscal discipline with social responsibility.