Despite cost-cutting measures, the federal government has approved an additional Rs28 billion in rewards and allowances for civil servants under the austerity drive.
According to media reports, the federal cabinet, while reviewing the budget allocations, noted that employees had already received Rs42 billion in allowances during the fiscal year 2024–25.
The government announced the new allocation in line with the demands of civil servants and administrative requirements. As per details, the Finance Division confirmed that employees across different departments will benefit from the Rs28 billion reward package in addition to the previously disbursed Rs42 billion.
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Officials explained that the move follows federal government policy guidelines, under which allowances and special incentives are provided to officers and staff despite the prevailing financial crisis. The State Bank had earlier indicated fiscal pressures, but the government prioritized employee demands to ensure administrative functioning.
Experts believe the approval of Rs28 billion in new rewards, despite rising debt and fiscal constraints, highlights the political challenges in implementing austerity measures. The government, however, maintains that this step was essential to sustain the morale and efficiency of its workforce.
