10pc hike in salaries, pensions of civil, military employees

ISLAMABAD: The federal budget 2018-19 presented by Federal Finance Minister Miftah Ismail in the National Assembly on Friday proposed an ad hoc relief of 10 per cent in the salaries and pensions of civil and military employees with effect from July 1, 2018.

Considering the difficulties of low-paid pensioners, the minimum pension is being increased to Rs10,000 from the current Rs6,000. Similarly, the family pension will also be increased to Rs7,500 from Rs4,500 previously. The minimum pension of pensioners above the age of 75 will be Rs15,000. As much as fifty (50) percent increase was proposed in the house rent of government employees.

In the budget estimates for the next fiscal year, the overall allowance of staff car drivers and dispatch riser is being increased from Rs40 per hour to Rs80 per hour.

An allocation of Rs12 billion was proposed for provision of advances to government servants for house building and purchase of transport facility. An amount of Rs5 billion has been allocated for senior officers’ performance allowance, details of which would be announced later.

Miftah said the total financial impact of raise in pay and pension with increase in allowances is about Rs69 billion. “Our government has consistently increased pay and pensions of government employees over the last five years and despite fiscal constraints a further relief is being provided to government servants and pensioners although inflation this year currently stands at 3.8 percent,” he said while counting relief to salaried class.

The total pension bill of the civilian and armed forces is estimated at Rs342 billion for the next fiscal year and in the current budget Rs248 billion has been allocated, while the revised estimates will be Rs333.35 billion.

Miftah said the increase would be apart from the major relief the salaried class would get due to drastic slash in the income tax rates, announced earlier by Prime Minister Shahid Khaqan Abbasi.

He said the salaried persons mostly belonged to the middle class and would be the major beneficiary of the relief measures that would have a financial impact of Rs69 billion. Ismail said under the income tax relief package for individuals, there would be no tax on income of up to Rs1.2 million annually, 5 per cent on income exceeding Rs1.2 to Rs2.4 million, Rs60,000 plus 10 per cent on income from Rs2.4 to Rs4.8 million, Rs180,000 plus 15 per cent on income exceeding Rs4.8 million.