Budget 2025-26: Govt Plans Salary Increase for All Grades

The federal government is preparing to unveil a significant relief package for its employees in the upcoming Budget 2025–26, set to be announced on June 10. According to official sources, “a 30% disparity allowance has been proposed for employees from Grade 1 to 16,” while “a 15% salary increase has been proposed for employees from Grade 17 to 22.”

Additionally, “a 10% increase in salaries and pensions is proposed in the upcoming budget,” signaling a broader effort to provide financial relief amid ongoing economic challenges. Authorities are also reviewing “another proposal to merge the 2022 ad-hoc allowance into the basic salary.”

The total outlay of Budget 2025–26 is expected to reach Rs17.68 trillion, with a focus on curbing expenditures. One of the key areas of savings is a likely reduction in the policy rate, which “is expected to cut expenditure on loans and interest payments by approximately Rs1,300 billion.”

To further control expenses, the federal government is expected to introduce strict austerity measures. “The government is likely to impose a ban on purchase of new vehicles for all federal ministries and departments.” Furthermore, “ministries would also be instructed to limit their electricity and gas expenses.”

On the downside, fuel prices may surge in the latter half of June 2025. As part of the revenue strategy, “government announced a new carbon levy of Rs2.5 per litre on fuel products.” With current prices at Rs253.63 for petrol and Rs254.64 for diesel, “prices could rise to approximately Rs. 256.13 for petrol and Rs. 257.14 for diesel” following implementation of the new tax.

The final budget details will be revealed during the formal presentation, but initial proposals suggest a mix of public sector support and economic restraint.