7% increase announced in pensions of govt employees

The finance minister, Muhammad Aurangzeb, announced in the National Assembly on Friday that there will be a 7 per cent increase in the pensions of retired government employees under Budget 2026-27.

In addition to this, he also announced that the salaries of government employees will be increased by 7 per cent as well.

Total pension expenditure is estimated at Rs1,169 billion, including Rs822 billion for military pensions and Rs272 billion for civil pensions.

Before this, the budget document revealed that the government was likely to provide income tax relief to salaried people.

According to the reports, tax concessions were expected for those earning between Rs1.2 million and Rs2.4 million annually. This step was expected to provide additional financial relief to people who earn a middle income.

Earlier, the federal cabinet approved a 7 per cent increase in the salaries and pensions of government employees in the budget.

According to the details, a special meeting of the federal cabinet was held under the chairmanship of Prime Minister Shehbaz Sharif, in which the budget proposals and the draft finance bill for the fiscal year 2026-27 were formally approved.

The federal cabinet also took an important decision for government employees and pensioners who are burdened by the burden of inflation.

The meeting approved a 7 per cent increase in the salaries of government employees and a 7 per cent increase in the pensions of pensioners.

After this decision of the cabinet, the budget documents have been finalised. It will now be presented in the special budget session of Parliament, where the Finance Minister will present its full details to the nation.