Civil servants may receive pay increases of up to 15%
Within the federal budget for the fiscal year 2024–2025, government personnel should expect a salary increase of 10% to 15%.
It is also anticipated that the federal government will increase retired employees’ pensions by 10%.
In addition, there is a plan to raise the funds of the Employees’ Old-Age Benefits Institution (EOBI).
In addition, pension reforms are probably going to be implemented in order to lighten the load on the national coffers.
Sources claim that the federal government is debating whether to raise employee pay in light of the conditions set by the International Monetary Fund (IMF) as well as other considerations, such as inflation for the upcoming fiscal year.
For this reason, it is also conferring with the provinces.
The governments, however, will make the ultimate decision after considering the ministry of finance’s suggestions.
The increase will go into effect in July of this year if it is authorized.
According to a federal minister, in an effort to relieve the financial burden on the economy, the government is thinking of raising the retirement age and changing the way pensions are paid out.
Pension payments are viewed as a “big liability” by Federal Finance Minister Muhammad Aurangzeb.
Speaking at the event, Federal Law Minister Azam Nazeer Tarar discussed plans to keep seasoned workers in order to lessen financial strain, with laws covering a range of industries.
He went on to say that Prime Minister Shehbaz Sharif had appointed a committee to make proposals for pension reform.
As the government sets its budget, the unfunded liabilities aspect of the pensions and the rise in its spending are becoming more and more of a challenge.
For the fiscal year 2023–24, Pakistan allocated Rs801 billion for superannuation benefits and pensions as a current expense, a 31% increase over the Rs609 billion set aside for this purpose in the previous FY.
While the government was negotiating a fresh bailout package with the IMF review mission, the international lender demanded that social protection and poverty alleviation programs be expanded even further.
Sources claim that the IMF placed a strong emphasis on expanding the Benazir Income Support Programme’s (BISP) scope, guaranteeing its openness, and enhancing its administrative effectiveness.
It further said that every effort should be made to increase the money allocated to cash transfer programs for the underprivileged.
Pakistani officials briefed the IMF mission that this year’s BISP would cost Rs472 billion.
They also mentioned that the cash transfer program will shield the BISP recipients from potential increases in the cost of electricity.
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