The Economic Coordination Committee (ECC), chaired by Finance Minister Muhammad Aurangzeb, approved a new policy giving the Finance Minister discretionary powers to grant budget honorariums to government employees. This applies mainly to employees in economic ministries, parliament, and the Prime Minister’s Office. The policy removes any upper limit on the number of budget honorariums the minister can approve.
According to the new policy, honorariums will be taxed at a lower rate similar to the monetisation allowance, with only 5% income tax instead of standard rates. The Finance Minister stressed that the discretion is exercised based on recommendations from honorarium committees and financial authorities within ministries.
The policy also allows federal secretaries to grant one honorarium annually to employees up to grade 18. For grades 19 and above, the Finance Minister’s approval is required. Additionally, secretaries may award a performance honorarium equal to one basic pay to up to 25% of ministry employees showing outstanding work.
Importantly, only one ordinary honorarium, one performance honorarium, and unlimited budget honorariums approved by the Finance Minister are allowed. No cash payments will be made, and honorariums must appear on payroll statements. Employees receiving budget honorariums cannot get other honorariums in the same fiscal year.
Besides this policy, the ECC also approved Rs61.2 billion in supplementary grants for ministries, including funds for short-term debt repayment and defense technology upgrades. It also cleared power agreements for Karachi’s nuclear plants and amended import policies for defense production entities.