Prime Minister Shehbaz Sharif has formed an eight-member special committee to review and propose revisions or new allowances for government servants during the financial year.
Chaired by Finance Minister Muhammad Aurangzeb, the committee includes secretaries from finance, defence, interior, and other ministries, along with the minister for economic affairs and the state minister for finance and revenue.
According to an official notification, the committee will evaluate proposals from the finance division and make recommendations for cabinet approval during the annual budget process.
This follows the salary increase of up to 25% for civil employees and military personnel in June and a more than 100% increase in judicial compensation last month.
This decision comes despite a shortfall in revenue collection, which grew by only 23% in the first five months of the fiscal year, against the targeted 40% growth needed to achieve Rs12.97 trillion by June 30, 2025.
A study by the Pakistan Institute of Development Economics (PIDE) revealed that the federal government spends over Rs8 trillion annually on its 1.92 million employees, pensions, and a wide range of perks and allowances.
The judiciary and Pakistan Administrative Services (PAS) are the largest beneficiaries, with significant non-monetary benefits and privileges, often sidelining technical and professional staff in the process.
PIDE’s study found that the Basic Pay Scale (BPS) system, in place since 1983, has undergone 12 revisions but lacks alignment with modern human resource principles.
Non-monetary benefits, including government housing, official vehicle usage, and medical reimbursements, substantially inflate the cost of higher-grade civil servants, sometimes exceeding 1.2 times their basic pay.
The study also highlighted disparities within the public sector, noting that judicial employees receive the highest number of perks, while secretariat staff and other ministries receive allowances equal to 150% of their basic salary.
