Increase in salaries will be subject to approval from the federal cabinet and the International Monetary Fund.
Various proposals have been prepared in the new budget to increase salaries of the salaried class and pensioners.
Sources say a proposal to increase salaries of government employees by around 10 percent in the upcoming budget is under consideration. In addition, there is also a proposal to merge one of the four ad hoc allowances granted between 2022 and 2025 into the basic salary.
According to sources, proposals are also being considered to provide relief to salaried individuals earning between Rs100,000 and Rs200,000 per month. Moreover, a 50 to 75 percent increase in conveyance allowance has been proposed for officers in grades 20 to 22, while a disparity allowance has also been proposed for employees from grades 1 to 16.
For pensioners, a proposal suggests an increase of up to 80 percent in line with the average inflation rate over the past two years.
Sources further stated that a reduction in income tax is expected for salaried individuals earning between Rs1.2 million and Rs2.2 million annually. Negotiations with the IMF are ongoing regarding salary increases and tax relief.
Additionally, a proposal is under consideration to include the armed forces in a contributory pension scheme from the next fiscal year. The prime minister and federal cabinet will be taken into confidence regarding salary and pension-related proposals.
Due to rising petroleum prices, there is also a proposal to double the conveyance allowance for employees in grades 1 to 19.
Also Read: Govt hints at massive relief under 2026-27 budget
