Increase in the salaries by 10% would have increased the amount of expenditure on federal salaries by Rs20 billion, sources said.
In a move to support retired employees, the minimum monthly pension amount was also increased from Rs3000 to Rs5000. However, for the first time in years, the salaries of government employees have seen no change.
Terming it a "relief measure" for retired government employees, Dar said, "Despite the austerity drive, we are mindful of the challenges faced by pensioners and to assist them we have decided to increase pensions by 10% from July 1 - with additional relief being provided to low pensioners."
No salary increase
Sources privy to the cabinet meeting which approved the fiscal budget on Wednesday told The Express Tribune, that the federal cabinet was undecided over the matter of increasing government employees' salaries.
For the last five years, pensioners have seen a 15 to 25 per cent annual rise in their pensions with slight variations.
Sources detailed that despite being in a struggling fiscal situation, authorities were considering an increase in the salaries of federal government employees from 7.5 to 10 per cent but later the idea was put aside in favour of pensioners.
The finance ministry had primed two proposals for the government on the matter, sources added.
The first proposal was to link the increase in salaries with the annualised rate of inflation, which was expected to remain in the range of 7.5%.
Subject to approval, this proposal would have increased the federal government's expenditure by almost Rs15 billion.
Had the proposal been approved, over half of government's estimated expenditures for the next fiscal year would have gone in the payment of salaries.
In addition to 650,000 armed personnel, there are approximately 600,000 federal government employees.
Salaries to the military personnel are paid out of the defense budget but the pension cost is borne by the civilian government.
The second proposal was to increase the salaries by 10%, which would have increased the amount of expenditure on federal salaries by Rs20 billion, sources said.
For the next fiscal year, the pension bill has been estimated at Rs171.3 billion and 77.2% of it will be spent on paying the pensions of retired military officers.
Two factors have influenced the provisions pertaining to the salaries of government employees.
The first is the response of the provincial governments, which employ over 2.2 million employees; and secondly, the fact that a 20% increase was already given to the employees of the Federal Secretariat in March this year.
Now, different pay structures have been put in place for the employees who work in the judiciary, military, Presidency, Prime Minister's Secretariat, National Accountability Bureau and those employed in other departments.
Sources said there was also a proposal to merge some of the ad-hoc allowances given during the last three years.
Ad-hoc relief allowance of 50% given in 2010, 15% in 2011 and 20% in 2012 are not merged in the basic pay, at present.
Mergers will not only increase the annual benefits of the employees but would also increase allowances related to house rent and medical expenses.
Secretary Finance promised increase in Employees Salaries
President Employees’ coordination council Chaudhary Muhammad Hussain Tahir expressed his reservations over no increase in the salaries of government employees employees in the federal budget, despite a commitment on it by Dr Waqar Masood Khan.
The council had presented Charter of Demand (CoD) to secretary finance earlier in which they demanded that salaries be increased by 100%, ad-hoc allowances be merged in basic pay, medical allowances be increased and housing subsidy be provided instead of house rent allowance.
Tahir said the finance secretary had assured the council delegation that employees' pay would see an increase considering the rise in inflation rates.
COMMENTS (11)
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There is so much increase in the dearness but no increase in salaries.
Ishaq Dar is deliberately lying. 20% increase was not given to all employees. It was given only to Federal secretariat employees
Glad to know Government Employees salary not increased. Their salary already increase more than double in last Four years and progress is Nil. The should resign instead of protest if they don't work on this salary. Lots of talented & Educated UN-employed people is ready to get their positions on same salar
Miss. Aliya, School teacher job is best in Pakistan. Lot of holidays and zero Progress. In fact government teacher send their children in private schools. Furthermore Government Teacher has 75% tax relief on income...What else you want.
Miss. Aliya, School Government teacher job is best in Pakistan. Lot of holidays and zero Progress. In fact government teacher send their children in private schools. Furthermore Government Teacher has 75% tax relief on income...What else you want.
Good Budget..But Salary Slabs should not be changed. Now the Salaried person who is already paying tax have to pay more tax which is not justified.
Pension is increased that very good. I support the decision that government employees salary not increased. Their Salary is already very high and increased 120% in last fiver years. Dearness is equal for everyone but private employees salary is not increased like government employees every year.
@Syed A. Mateen
I want to apprise you that your comment is very arrogant. Your are refering to all departments/autonomous/semi autonomous government functionaries as corrupt, However your are basing your opinion only on your interaction with police, land revenue and your district development authority. I think such broad generalizations are very juvenile.
The Government employees have never been on agenda of PML-N Never. Only a fool would expect any benefit from them. KPK employees may now pin hopes on IMran Khan. Let's see which way the wind is blowing.
I am glad to know that government has increased the percentage of the pensioners.
I am also glad in saying that government did not increased the salaries of government servants, with few exception, are mostly corrupt. They take illegal gratification whether in cash or kind.
Government Employees should thank Al-Mighty Allah that neither I am Chairman NAB, nor Chief of Accountibility Bureau, otherwise, I would have open files of all civilian government servants as where did they get the money from to purchase and construct expensive properties, out of which most of them have been rented out and the government servants are living in accommodation provided by the government.