Govt Plans 80% Pension Increase, Tied to Inflation
The Finance Ministry is expected to shift from a one-time lump sum pension increase for retired civil servants to a new system that would raise pensions by 80% over the next two years, in line with inflation rates, according to high-level sources.
Instead of a flat increase, the proposed plan will adjust pension hikes based on inflation data from the State Bank of Pakistan. This change aims to ease the growing pension burden on the national treasury.
For the current financial year, the government has allocated Rs. 1,014 billion for pensions. Initially, the budget included a 15% increase in pension payouts, but the new system will tie future adjustments directly to inflation trends, following recommendations from the Pay and Pension Commission 2020.
Additionally, the Finance Ministry aims to reduce inflation to single digits by the next fiscal year to stabilize the economy.
