Daily Times

ISLAMABAD: The federal government will not merge the 50 percent ad hoc relief allowance in the basic salaries of government employees in the upcoming budget, sources say.

A proposal to increase the salaries of government employees from 10 to 13 percent in the upcoming budget is under consideration.

According to the sources, a three-member government committee reviewed the proposal to merge all four ad hoc relief allowances in the basic salary. The committee however decided that it would not be possible for the government to merge the ad hoc relief allowances of 50 percent, which were given in 2010, in the basic salaries in the upcoming budget due to a tight budgetary position.

The government is considering merging the remaining three ad hoc relief allowances — 10 percent, 10 percent and 7.5 percent — in the basic salary of the government employees. The sources said that government circles agreed to give more relief to pensioners than the salaried class. “Their pension will be increased by 15 to 20 percent in the upcoming budget,” the sources said.

It is pertinent to mention here that Finance Secretary Dr Waqar Masood and Special Secretary (Finance) Dr Shujat Ali would retire from service in the next financial year; therefore, they used this opportunity to have the pension increased more than the salary.

The government discussed proposals relating to increase in government employees’ salaries with IMF officials in Dubai in the beginning of this month and both sides agreed that employees should be given a pay raise according to the prevailing rate of inflation in the country.

The government claims that inflation rate remained between 3 to 4 percent during the current year and it would rise to 5 to 6 percent in the next financial year. Experts however say the rate of inflation was 25 to 30 percent in the country during 2015-16 and it could cross 35 percent next year.