ISLAMABAD – The federal government has proposed an increase of 10 percent in salaries and pensions of government employee in Budget 2017-18.

On Friday, Federal Finance Minister Ishaq Dar presented the fifth budget of the incumbent PML-N government with total outlay of Rs 4.778 trillion.

For the next fiscal year, Dar announced merger of ad hoc relief of 2010 for Civil Servants in the basic salary and topped it up with a 10 percent ad hoc relief 2017.

He announced exemption of employees up to BPS-5 from the house rent deduction, while an increase of upto 60 percent in daily allowance rate, peon allowance raised from Rs 12,000 to Rs 14,000, payment for burial etc raised from Rs 1600 to Rs 4800 and from Rs 5000 to Rs 15000.

He said the allowances for Pakistan Post employees were also being increased, besides a 50% increase in design allowance.

Earlier in 2016, the incumbent government had announced a same 10 percent increase in the salaries of federal government employees under the budget 2016-17.

He had said that 10pc ad-hoc relief allowance on running basic pay will be allowed to all the federal government employees with effect from July 1, 2016.

Similarly, he had announced 10 percent increase in net pension to all pensioners of federal government with effect from July 1. A 25pc raise in net pension to all pensioners of federal government above the age of 85 years will also be in effect from July 1.