ISLAMABAD: The federal government is considering a proposed salary increase of 10 to 15 percent for public sector employees in the 2026-27 federal budget, with a final decision expected after further consultations led by Prime Minister Shehbaz Sharif.
The proposal was discussed during a budget consultation meeting at the Prime Minister’s House, where officials reviewed key fiscal matters, including the Public Sector Development Programme (PSDP), taxation measures, and potential relief for government employees and pensioners.
According to sources, Finance Minister Muhammad Aurangzeb briefed the prime minister on major aspects of the upcoming budget. The proposed salary increase is linked to inflation levels and is aimed at providing relief to public sector workers amid rising living costs.
Relief measures under review
Sources said the government is evaluating available fiscal resources before finalizing any increase in salaries and pensions. Prime Minister Shehbaz Sharif reportedly directed officials to assess how much relief can realistically be provided within budgetary constraints.
The discussions also covered broader budget priorities, including development spending and revenue measures for the next fiscal year.
Final decision pending consultations
Officials said the final decision on salary increases for government employees will be made by the prime minister after consultations with coalition partners and a review of the government’s financial position.
The federal budget for fiscal year 2026-27 is expected to outline the government’s plans for public spending, taxation, and economic management for the coming year.
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