The government on Friday announced a 15% increase 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 has 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.

“Also merging of adhoc allowances into the basic pay is approved,” she added.

On Friday, Miftah Ismail, the finance czar, unveiled the federal budget with a total outlay of Rs9.5 trillion in the National Assembly, targeting economic growth of at least 5% during fiscal year 2022-23.

Tax on banking sector enhanced to 42% from 39%, says Miftah while announcing budget proposals

The budget comes at a time when Pakistan’s economy remains engulfed in a balance of payments' crisis, and remains engaged in talks with the International Monetary Fund (IMF) over revival of the stalled Extended Fund Facility (EFF).

On Thursday, Miftah on the sidelines of the Economic Survey 2021-22's launching ceremony, had said that the government will raise salaries of its employees.

"We should understand that government employees have to run their households as well," said Miftah when asked the question by a journalist on Thursday.

"It cannot be the case that as the country sees 12-15% inflation we don’t raise the salaries of government employees," said Miftah.