Servicemen, civilians to get equal pay raise

Express Tribune

26-05-2025

Finance Minister Muhammad Aurangzeb said on Monday that there was no proposal in the budget to increase salaries of the armed forces more than the civilian government employees and assured that the nation's defence needs would be fully met.
In a media interaction after attending a seminar, the finance minister also said that India did not leave any stone unturned to derail Pakistan's $7 billion package but it could not succeed. "There is so far no such proposal" for increasing the defence salaries more than that of the civilian employees, the finance minister said, responding to a question.
The statement clears the air after rumours swirled suggesting that the government was considering significant increase in the salaries of the armed forces. The government is considering a proposal to increase salaries in the range of 6% to 10% due to low single digit inflation rate.
While responding to another question, Aurangzeb said that whatever support the government could provide for meeting the defence needs would be fully provided. "This is about meeting the needs of the country, not just meeting the needs of the armed forces of Pakistan," he added.
The finance minister also talked about malicious Indian designs to choke Pakistan's external financing.
"There is immense support by the IMF despite the kind of efforts [India made] to derail the IMF programme," he said and added that had there been shortcomings in the implementation of the programme, there would have been some problems.
Pakistan's case was discussed and approved on merit, because it met all the quantitative and structural benchmarks, he said. "These are very tense moments. The entire nation has rightly celebrated the way our armed forces and political leadership have stood up against aggression," he continued.
"There was no stone left unturned in terms of ensuring that the meeting with the IMF does not happen and if the meeting does happen, then these items are not on the agenda, whether it's the second tranche under the Extended Fund Facility or the $1.3 billion under the Resilience and Sustainability Facility (RSF)," the minister said.
"However, we are beyond that, and our case was discussed and decided on merit."
Addressing an event, organized by the Karandaaz Pakistan and the Pakistan Banks Association (PBA) in Islamabad, Aurangzeb said that the federal government was preparing to introduce "bold measures" in the upcoming budget with a focus on strategic direction. "We are going to bring some bold measures during the budget for FY 2025-26," he said.
He said that rather than making the math work, the government intended to make the budget document more strategic. The federal budget for FY 2025-26 will be presented on June 10, 2025 and the Economic Survey will be launched a day earlier.
To yet another question about the delay in concluding IMF talks, the finance minister said that the IMF talks would continue next week virtually, but the main discussions had already taken place.
He said that the government had achieved macroeconomic stability in the past too but "we have squandered" the opportunity. "Because it is easy to get into a sugar rush, ie pump liquidity into the market, go for consumption-led growth," which triggered balance of payment and FX issues, he said.
To break away from the boom and bust cycle, Aurangzeb said, Pakistan needed to stay the course in terms of structural reforms. He stressed that the government remained committed to simplifying tax return filing process for the salaried class.
He added that 70 to 80% of the salaried class did not necessarily hold equity or income portfolios and they should not be required to fill 150 columns. "We are trying to bring it down to nine items, five on the wealth and four on the income tax side." The minister added that the government wanted to implement a simplified process by the end of September.
The finance minister admitted that the government could not perform well on the state-owned enterprises reform in the last year but hoped that the agenda would be expedited in the new fiscal year. He said that the PIA transaction had been launched again and expressed optimism about its completion.
On debt servicing, Aurangzeb said that in the ongoing fiscal the government debt servicing cost had decreased by Rs1 trillion but stated that it was not a success, as the reduction was because of reduction in the interest rates. "Next year, we are going to restructure and reorganise the debt management office along modern lines," he said.
Aurangzeb termed the country's economy crossing the $400 billion mark as a matter of satisfaction. "Our economy has crossed the $400 billion level. This shows we're moving in the right direction", he added. But he argued that to become a $3 trillion economy by 2047, Pakistan needed to tackle the challenges of 2.6% population growth rate and climate change.