ISLAMABAD (Dunya News) — The federal cabinet has approved an increase in salaries and pensions for government employees as part of the budget proposals for the fiscal year 2026-27.
The decision was taken during a special meeting of the federal cabinet chaired by Prime Minister Shehbaz Sharif in Islamabad, where the draft budget documents for the upcoming financial year received formal approval.
During the meeting, the cabinet held detailed discussions on relief measures for government employees and pensioners. Following deliberations, it approved a 7 percent increase in salaries of federal government employees and a 7 percent increase in pensions.
The cabinet also decided to merge the 15 percent ad hoc relief allowance granted in 2022 and the 10 percent ad hoc relief allowance announced in 2025 into the basic pay structure.
Following the cabinet's approval, Federal Minister for Finance Muhammad Aurangzeb is set to present the federal budget for fiscal year 2026-27 before the National Assembly.
Addressing the meeting, Prime Minister Shehbaz Sharif thanked coalition partners for their support in the preparation of the budget and also expressed gratitude to the International Monetary Fund (IMF) for its cooperation.
The cabinet meeting concluded with federal ministers and ministers of state expressing support for the prime minister's economic agenda through desk-thumping.