ISLAMABAD (Web Desk) – The federal cabinet on Friday approved an increase in salaries and pensions for government employees as part of the budget proposals for the fiscal year 2026-27.
The decision was taken during a special cabinet meeting chaired by Prime Minister Shehbaz Sharif in Islamabad, where draft budget documents for the upcoming financial year received formal approval.
After detailed discussions on relief measures, the cabinet approved a 7 percent increase in the salaries of federal government employees and a 7 percent rise in pensions for retired employees.
It also decided to merge the 15 percent ad hoc relief allowance granted in 2022 and the 10 percent ad hoc relief allowance announced in 2025 into the basic pay structure, a move aimed at strengthening long-term financial benefits for employees.
Following the cabinet’s approval, Finance Minister Muhammad Aurangzeb is scheduled to present the federal budget for fiscal year 2026-27 before the National Assembly.
Addressing the meeting, Prime Minister Shehbaz Sharif thanked coalition partners for their support in finalising the budget and acknowledged the cooperation of the International Monetary Fund (IMF) during the process.
The meeting concluded with federal ministers and ministers of state reaffirming their support for the government’s economic agenda through desk-thumping.
