Budget: Surprises dished out for serving, retired government employees

ISLAMABAD: The pension of retired government employees was increased by 10% raising the pension bill to an estimated 171.3 billion; while the salaries of the government employees was kept unchanged for the first time in years.

The minimum monthly pension has been raised from Rs3,000 to Rs5,000. However the government employees who expected to hear good news in the finance minister’s budget speech were disappointed as no announcement was made for them.

Discussing the pension raise, Finance Minister Ishaq Dar said: “Despite the austerity drive we are mindful of the difficulties being faced by retired government employees and to mitigate their difficulties we have decided to increase pensions by 10% from July 1, 2013; with an additional relief to low pensioners, whose minimum pension is increased from Rs3000 to Rs5000”.

Sources privy to the cabinet’s pre-budget meeting told The Express Tribune that the federal cabinet was undecided over an increase in the salaries of government employees. However it approved 10% increase in pension.

Sources further elaborated that “despite being in a stiff fiscal situation, authorities were considering increasing the salaries of government employees from 7.5% to 10%; but later on the idea was put aside and it was decided to give a significant raise to 1.8 million pensioners”.

Sources added that the finance ministry had primed two proposals for the government to provide support to federal government employees.

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%. The second proposal was to increase salaries by 10%, which would bump up the size of federal salaries bill by Rs20 billion, sources said.

Published in The Express Tribune, June 13^th, 2013.