The federal government has set a proposal to increase the salaries of government employees by up to 15 per cent in budget 2026-27.
The discussions took place during an informal meeting chaired by Prime Minister Shehbaz Sharif at the Prime Minister’s House on Friday.
According to sources, this meeting was held without media coverage and focused on key financial and budgetary matters for the next fiscal year.
Additionally, during the meeting, participants reviewed various aspects of the upcoming federal budget, including the Public Sector Development Programme (PSDP), tax proposals, increase in government employees’ salaries and pensions, along with other important economic issues.
Sources said that Finance Minister Muhammad Aurangzeb briefed Prime Minister Shehbaz Sharif on the main features of the proposed budget and the government’s broader fiscal strategy. The briefing reportedly covered revenue projections, expenditures that are expected, and the overall economic framework within which the budget is being prepared.
One of the key issues discussed was relief for government employees amid ongoing inflationary pressures. According to officials, a salary increase ranging from 10 to 15 per cent is being considered for public sector workers. The proposal is intended to help employees cope with rising living costs and the impact of inflation on household budgets.
However, sources indicated that Prime Minister Shehbaz Sharif has directed relevant authorities to conduct further calculations and assessments before a final decision is made. He reportedly emphasised the need to evaluate the country’s financial capacity and available resources carefully in order to provide the maximum possible relief without placing excessive pressure on the national budget.
The meeting also included discussions related to pension relief measures. Different options for supporting pensioners were reviewed. The government seeks ways to address the financial challenges faced by retired employees. In addition, officials examined funding requirements and priorities for development projects planned under the PSDP.
Overall, the budget proposals are expected to be finalised within the next few days. Upon completion, the recommendations will be presented to the federal cabinet for approval before being submitted to Parliament as part of the federal budget for the upcoming fiscal year.
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