Rise in salaries, pensions of govt employees to cost kitty Rs100bn: Miftah

The increase in salaries and pensions of government employees in the new budget will cost the national kitty Rs100 billion, revealed Finance Minister Miftah Ismail.

“The 15% increase in employees salaries would cost the government exchequer Rs73 billion. If we include the 5% increase in pensions, this adds up to around Rs100 billion,” said Miftah, while talking to a private channel.

The remarks come as the government said that it aims to achieve fiscal consolidation and presented a Rs9,502 billion budget for the next fiscal year with an economic growth target set at 5% and a budget deficit of 4.98%.

The government on Friday announced a hike in salaries of its employees while merging adhoc allowance with the basic salary as well.

In a tweet, Federal Minister for Information and Broadcasting Marriyum Aurangzeb said Prime Minister Shehbaz Sharif had rejected the Finance Ministry’s proposal of a 10% increase, and instead, approved an increase in government employees’ salaries of 15% with the consent of the cabinet.

Govt approves 15% raise in salaries of govt employees, merges adhoc into basic pay

Meanwhile, Miftah said that inflation is expected to spike further in the coming days as oil prices remain high. “Petrol prices hover at around $123 per barrel, thus OGRA has recommended that in the next price hike, the rates of diesel shall be raised by Rs55 per litre, while the rate on petrol shall be increased by Rs28-30 per litre,” he said.

The minister said the government has set a target to collect Rs750 billion in petroleum levy in Budget 2022-23 and intends to impose a tax with a gradual increase of Rs5. "There is a need to increase tax on petroleum products," he said.

On LNG, Miftah said that as many as nine LNG cargoes are likely to reach Pakistan from Qatar.

“We need to have twelve LNG cargo on long-term basis to fulfill demand in the energy sector. Furthermore, we could purchase 1-2 cargoes in the current system,” he said. “We have made a request with Qatar Gas to install a terminal in this country,” he added.