Govt Considers Salary & Pension Boosts in 2026-27 Budget

Federal Government Proposes Budget Changes for FY2026-27

The federal government has prepared a set of proposals for the upcoming fiscal year 2026-27 budget. These include potential increases in salaries and pensions for government employees, according to sources.

Budget sessions were initially proposed for June 1 but were revised due to many lawmakers being in Saudi Arabia for Hajj pilgrimage. Over 60 members of parliament are expected back in early June.

The three major proposals aim to provide relief to government employees and pensioners. They include a 5-10% increase in salaries and pensions, merging some ad hoc allowances into basic pay, and introducing a disparity allowance for lower-level staff.

A minimum wage increase is also being considered, though the final rate remains undetermined. For pensions, the proposals suggest using the average inflation rate of the past two years as a basis for increases.

The government has requested the International Monetary Fund (IMF) to allow a 5-10% reduction in the tax burden on salaried classes. These proposals are expected to be presented to the federal cabinet soon and then debated in the National Assembly and Senate.