Govt Approves 10% Salary Hike, 7% Pension Increase in Federal Budget 2025-26

ISLAMABAD – The federal cabinet, under the leadership of Prime Minister Shehbaz Sharif, has approved a 10% salary increase for government employees and a 7% hike in pensions as part of the Federal Budget 2025-26, aimed at providing much-needed relief to the salaried and retired segments of society.

Finance Minister Muhammad Aurangzeb confirmed the increase during his budget speech in the National Assembly on Tuesday, stating that the pay raise would apply to civil servants from Grade 1 to 22.

In addition to the salary and pension revisions, the government has also approved:

• 30% hardship allowance for eligible government employees
• A special relief allowance for officers and soldiers of the armed forces, to be covered under the defense budget
• An increase in the special conveyance allowance for disabled employees, raised from Rs4,000 to Rs6,000 per month

Pushback from Employees Amid Soaring Inflation

Despite the announced increases, several employee associations have expressed dissatisfaction, stating that the 10% raise does not match the pace of inflation. Many had demanded a minimum 50% salary increase, warning of potential protests if their concerns were not addressed.

Sources say the government had initially considered three options: 6%, 10%, or 15%, but ultimately settled on 10% due to fiscal constraints. The Finance Ministry reportedly urged caution, citing the delicate macroeconomic situation.

PM Shehbaz Addresses Nation and Global Concerns

In his address to the cabinet and the nation, PM Shehbaz Sharif extended Eid-ul-Adha greetings and praised the resilience of the people amid economic challenges. He said the nation had contributed Rs400 billion to the national treasury in the past 18 months and emphasized that Pakistan is now positioned for a “transformative leap forward.”

He also touched on international issues, issuing strong condemnations of human rights violations in Palestine and Indian-occupied Kashmir, calling on world powers to enforce an immediate ceasefire.

“No amount of condemnation is enough for the brutality inflicted on the innocent people of Palestine and Kashmir,” the premier said. “Pakistan will continue to stand by the oppressed.”

Pakistan’s Resolve on National Security and Water Rights

The Prime Minister asserted Pakistan’s resilience against foreign aggression, saying the country had recently faced both military and economic challenges from an adversary but emerged stronger. “We will surpass our adversaries and secure Pakistan’s rightful place on the global stage,” he declared.

He also reiterated Pakistan’s firm stance on water security, stating that no one can use water as a weapon against the country. He credited the Deputy Prime Minister and relevant stakeholders for their work on national water resource management.

Efficient Budget Preparation Lauded

PM Shehbaz expressed gratitude to the finance minister and his team for their quick and effective preparation of the Federal Budget 2025-26, calling it a reflection of the government’s dedication to addressing national needs.

“This is a time for unity and collective action,” he said, urging citizens to come together to elevate Pakistan’s global standing and build a prosperous, resilient future.