Federal Minister for Finance Muhammad Aurangzeb announced on Wednesday a proposed increase of up to 25% in the salaries of government employees in the budget for the fiscal year 2024-25.
Presenting the federal budget for FY25 during the National Assembly session, Aurangzeb detailed the government’s plan to adopt a three-pronged strategy to reform the pension scheme in line with international best practices.
He explained that the government currently faces an increasing unfunded pension liability each year. With the proposed reforms, this liability is expected to be significantly reduced over the next three decades.
For new employees, a contributory pension scheme will be introduced, with the government contributing its share monthly. Additionally, a pension fund will be established to manage these liabilities.
Aurangzeb proposed a 20-25% increase in salaries on an ad-hoc basis and a 15% increase in pensions for federal government employees, acknowledging their financial hardships due to rising inflation.
Despite financial constraints, the government has decided to grant a 25% ad-hoc relief increase in salaries for employees from Grade 1-16 and a 20% increase for employees in Grade 17-22 to enhance their purchasing power.
The minister also announced an increase in the minimum wage from the current Rs32,000 to Rs36,000 per month.
