The federal cabinet has approved a Rs1.8 billion special allowance for senior bureaucrats despite continuing austerity measures and limiting the salary increase for most government employees to 7% in the 2026-27 federal budget.
The new benefit, titled the All Pakistan Services Provincial Governments’ Cadre Posts’ Parity Allowance, will take effect from July 1, 2026. According to officials, the approved allocation suggests the allowance could be close to 100% of an officer’s basic salary, although the government has not yet announced the final rate or eligibility criteria.
The allowance aims to reduce the pay gap between officers serving in the federal government and those working in provincial governments. Authorities believe improved financial incentives will encourage officers of the Pakistan Administrative Service (PAS) and the Police Service of Pakistan (PSP) to continue serving in federal institutions.
However, the decision has sparked criticism as it comes during ongoing austerity measures. While senior bureaucrats receive additional financial benefits, most government employees have received only a modest 7% salary increase despite rising inflation and the increasing cost of living.
The cabinet also approved revisions to the 150% executive allowance, which will now be calculated based on officers’ current basic salary instead of the 2017 pay scale, significantly increasing payments for officers in grades 17 to 22. At the same time, the government has extended austerity measures, including restrictions on new vehicle purchases, creation of new posts, foreign travel, and other non-essential expenditures.
