The federal cabinet has approved a new special allowance for senior bureaucracy, the second such benefit in four years, and allocated Rs1.8 billion for its disbursement, even as regular government employees received a salary increase of only 7 percent for fiscal year 2026-27.
The decision was made during a special cabinet meeting held on June 12 to approve the federal budget, though the Cabinet Division released details only on July 17.
In the same meeting, the cabinet, led by Prime Minister Shehbaz Sharif, approved the 7 percent salary raise for all government employees and extended austerity measures to the current fiscal year.
The new benefit, named the All Pakistan Services (APS) Provincial Governments Cadre Posts Parity Allowance, is the second special allowance approved by PM Sharif for senior officers, following a 150 percent executive allowance granted in June 2022.
The Rs1.8 billion allocation, effective from July 1, suggests the new benefit will equal at least 100 percent of basic pay. The secretaries of the Establishment and Cabinet Divisions did not respond to questions on the allowances purpose, rate, or whether a need-assessment study was conducted.
Sources said the rationale behind both allowances is the same: All Pakistan Services officers enjoy greater perks in the provinces and are reluctant to accept federal postings. Sources added that pay disparities also exist between the federal government, judiciary and bodies such as NAB and FBR.
Under Article 240 of the Constitution, All Pakistan Services officers serve in posts common to both federal and provincial governments. A recent World Bank report noted provinces have used National Finance Commission funds to repeatedly raise salaries and pensions.
The cabinet has directed the Establishment, Cabinet and Finance Divisions to recommend the allowances rate, structure and eligibility criteria to the prime minister for officers posted in Islamabad.
It also approved recalculating the 150 percent executive allowance on June 2026 basic pay, delinking it from 2017 levels, benefiting officers in grades 17 to 22. The executive allowance was earlier extended to other service groups after objections over unequal treatment.
