The federal government is actively reviewing three major proposals that could bring significant financial relief to government employees in Budget 2025.
Among the key suggestions under consideration is a 30% disparity allowance for Grade 1 to 16 employees, along with a 10% increase in salaries and pensions across the board.
According to sources close to the Ministry of Finance, detailed working papers outlining the financial impact of each proposal are being prepared for a special cabinet meeting.
This high-stakes session, to be chaired by Prime Minister Shehbaz Sharif, will finalize decisions regarding the salary and pension increase in Budget 2025. Once approved, the budget will be presented to Parliament on June 10 for final approval.
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One of the primary proposals suggests giving a 30% disparity allowance for Grade 1 to 16 employees, while Grade 17 to 22 officers may receive a 15% raise. Another proposal recommends a flat 10% increment in both salaries and pensions to offset inflation, benefiting all government employees and retirees alike.
A third possibility on the agenda is the consolidation of one or two prior ad-hoc relief allowances into basic pay, after which new pay scales would be issued. Significantly, the ad-hoc allowance issued in the fiscal year 2022 may be absorbed into the basic salary and a possible 10% increase be effected thereafter.
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Additionally, there is a proposal to exempt the Armed Forces from the new contributory pension scheme, which is also under discussion. Coalition partners have reportedly urged the government to move ahead with the salary hike, adding pressure to honor previous commitments made to underprivileged government employees.
Insiders revealed that a written agreement had been signed between employee representatives and the government, assuring an end to pay discrimination. With this in mind, a parliamentary committee headed by Dr. Tariq Fazal Chaudhry reaffirmed that the government remains committed to fulfilling its promises.
Meanwhile, government employees have demanded a 50% increase in both salaries and minimum wage. If these demands are not addressed, unions have threatened to stage a protest in front of Parliament on June 10—the same day the budget is scheduled to be presented.
