Federal Minister for Finance Muhammad Aurangzeb announced today a proposed increase of up to 25% in the salaries of government employees as part of the federal budget for the fiscal year 2024-25. The announcement was made during the National Assembly session where the minister presented the budget.
In his speech, Aurangzeb outlined the government’s plan to adopt a three-pronged strategy to reform the pension scheme in accordance with international best practices. He emphasized the growing burden of unfunded pension liabilities, which increase annually. According to the minister, the proposed pension reforms aim to substantially reduce these liabilities over the next three decades.
“For new employees, a contributory pension scheme will be introduced, with the government contributing its share monthly,” Aurangzeb stated. He also mentioned the establishment of a pension fund to manage these liabilities effectively.
Recognizing the financial challenges faced by federal employees due to rising inflation, Aurangzeb proposed a 20-25% ad-hoc salary increase and a 15% pension enhancement. Specifically, the proposal includes a 25% ad-hoc relief in salaries for employees from Grade 1-16 and a 20% increase for those in Grade 17-22.
The budget also includes a provision to raise the minimum wage from the current Rs32,000 to Rs36,000 per month, aiming to improve the purchasing power of the workforce despite the financial constraints faced by the government.
The proposed measures highlight the government’s commitment to addressing the financial needs of its employees while managing economic challenges.
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