Government officials likely to get 10-15% raise in salary in 2024-25 budget.
The government is planning various proposals for the upcoming 2024-25 budget, including salary increases for public sector employees, fiscal measures to meet IMF conditions, and pension reforms.
Salary Increases:
The proposed salary increases for public sector employees range from 10% to 15%.
The Ministry of Finance prefers a 10% raise, but there could be political pressure to increase it to 12.5% or even 15%.
Additionally, there are considerations to increase the monetisation of cars for higher-grade officers (grades 20-22) by 20-25% due to inflation.
Fiscal Measures and IMF Deal:
To secure a $6 billion deal with the IMF under the Extended Fund Facility (EFF), the government must demonstrate fiscal discipline. This includes:
- Increasing the Federal Board of Revenue (FBR) tax revenue target to over Rs12.5 trillion.
- Enhancing non-tax revenues.
- Restricting expenditures.
Pension Reforms:
The proposed pension reforms include several measures:
- Tax on High Pensions: Introducing a tax on pensions exceeding Rs100,000 per month, with different slabs for higher brackets.
- Retirement Age and Early Retirement: Proposing an increase in the retirement age by two to five years. Employees may opt for early retirement after 25 years of service with a 3% annual penalty on their pension until the age of superannuation.
- Pension Calculation: Pensions will be calculated based on 70% of the average pensionable emoluments drawn during the last 36 months of service.
- Pension Increases: Any increases in pension will be based on the amount calculated at the time of retirement and maintained as separate amounts until further government decisions.
- Family Pension: Limited to 10 years for entitled family members after the pensioner’s death, except for Shuhada Pensions (20 years) and disabled/special children (for life).
- Pension Commutation: Allowing federal employees to commute up to 25% of their gross pension at retirement under prescribed terms.
- Re-employment Pension Rules: Pensioners re-employed in public service must choose between retaining their pension or drawing a salary. If entitled to multiple pensions, they must select one.
As Government officials likely to get 10-15% raise in salary in 2024-25 budget, these measures aim to ensure fiscal sustainability and meet the IMF’s stringent requirements, reflecting the government’s commitment to economic reform while addressing inflation and public sector demands.
