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The federal government of Pakistan is working to introduce salary increments of up to 25% and additional allowances for its employees in the next fiscal year, according to reports. Despite facing a shortfall in revenue growth, with a 23% rise in revenue collection during the first five months of the current fiscal year, the Sharif-led government is moving ahead with the plan.
The decision comes amid growing dissatisfaction among federal employees, especially after recent salary hikes for judges. Officials are also considering a mini-budget as part of their agreement with the International Monetary Fund (IMF). However, inflation has dropped to 4.9%, and employees are pushing for higher compensation.
To address these concerns, Prime Minister Shehbaz Sharif has formed a special committee tasked with proposing new allowances for government employees. Recommendations will be presented during the upcoming annual budget process.
A recent report reveals that over Rs8 trillion is allocated annually for the salaries, pensions, and benefits of 1.92 million federal employees, but there is limited transparency regarding the impact of these expenditures. The report further highlights that the judiciary receives the highest benefits, while workers in Administrative Services receive disproportionately large benefits, which could be hindering progress in other sectors.
The overall cost of public servants is approximately Rs3 trillion, with Rs1.5 trillion allocated for pensions, Rs2.5 trillion for project workers and government company employees, and Rs1 trillion for military salaries.
