Proposals for 10pc to 20pc Pakistan wage hike under consideration

Proposals for 10pc to 20pc Pakistan wage hike under consideration


Increase in other benefits, including medical and conveyance allowances, also on the table

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ISLAMABAD (Dunya News/Web Desk) – The federal government is mulling over different proposals for pay raise of civil servants – a move which increases the expenditure amid the prevailing financial crunch but is necessary to mitigate the effects of inflation, which has reduced people’s purchasing power drastically. 

On the other hand, there is also a suggestion, sources in finance ministry say, to revise the monetisation policy – payment of benefits being enjoyed by public servants in cash en-bloc. 

Although Pakistan’s annual inflation has been on a constant decline since January this year as the consumer price index (CPI) for May dipped to a 30-month low of 11.8 per cent, the target population will certainly welcome the move, if materialised, though at least some of them may call it insufficient. 

Initially, the Budget 2024-25 was to be tabled in the National Assembly on June 8, but the move has been postponed till next week due to Prime Minister Shehbaz Sharif’s five-day visit to China. 

Meanwhile, the delay also means that the budget will now be presented after the central bank’s Monetary Policy Committee (MPC) meeting scheduled for June 10, as the market and experts are expecting around 300 basis points [3pc] cut interest rates, which are currently at 22pc, thus crippling the national economy. 

The sources say separate summaries prepared for the purpose suggest 15 per cent to 20 per cent wage hike for government servants falling in BPS-1 to BPS-16, while another proposal envisages a 10pc pay raise for all – from BPS-1 to BPS-22 – a move that will increase the government pay bill by Rs80 billion in 2024-25. 

Coming back to the monetisation policy, the sources maintain that the limit for BPS-1 to BPS-16 government servants is to be increased from Rs40,000 to Rs60,000 per month, followed by from Rs65,000 to Rs105,000 for BPS-17 to BPS-20 per month. 

The proposed monthly increase under this head for BPS-21 is from Rs75,000 to Rs110,000 and Rs95,000 to Rs155,000 for BPS-22. 

Hence, the proposal says conveyance allowance and medical allowance for BPS-1 to BPS-16 should be increased by 200pc from the current levels of Rs1,800 and Rs15,00 respectively. 

A similar 200pc increase is proposed in the case of conveyance allowance for the officials working in BPS-17 and BPS-18, who are currently getting Rs5,000. 

Meanwhile, these proposals also call for continuing with the disparity allowance, which is meant to reduce the pay difference between the federal and provincial public servants.

Therefore, it has been proposed that the BPS-1 to BPS-16 government servants should receive the 25pc and 15pc disparity allowance, extended to them in 2021 and 2022.

However, these proposals are still at an initial stage and the prime minister will make a final decision on the subject after consulting the finance ministry and his cabinet members.