Government Approves Rs1.8 Billion Special Allowance for Bureaucrats Amid Austerity Measures
ISLAMABAD: The federal government has approved a new special allowance worth Rs1.8 billion for senior bureaucrats despite continuing austerity measures, drawing criticism over the contrast between economic hardships faced by the public and enhanced financial benefits for government officials.
According to reports, the Federal Cabinet, chaired by Prime Minister Shehbaz Sharif, approved the second major special allowance for the bureaucracy in four years. The newly approved benefit has been titled the “All Pakistan Services Cadre Posts Parity Allowance” and will take effect from July 1, 2026.
The allowance follows the 150 percent Executive Allowance granted to bureaucrats in June 2022 and is estimated to be equivalent to at least 100 percent of an officer’s basic salary. A budget allocation of Rs1.8 billion has been made for its implementation.
Under Article 240 of the Constitution, officers of the All Pakistan Services—including the Pakistan Administrative Service (PAS) and the Police Service of Pakistan (PSP)—in Grades 17 to 22 who are serving in Islamabad and federal government institutions will be eligible for the allowance.
The cabinet has also approved linking the previously granted 150 percent Executive Allowance to officers’ current basic salaries as of June 30, 2026, instead of the 2017 pay scales, a move expected to substantially increase their overall compensation.
People get price hike- Bureaucrats to get Rs1.8b new allowance!
The federal cabinet has approved another special allowance for top bureaucracy – the second in four years – and sanctioned Rs1.8 billion budget in the middle of a further extension in austerity measures and a 7%…
— Shahbaz Rana (@81ShahbazRana) July 22, 2026
According to the report, the government justified the additional financial incentives by arguing that officers serving in provincial governments, the judiciary, and specialized institutions such as NAB and the Federal Board of Revenue (FBR) receive comparatively higher allowances, making federal postings less attractive for senior civil servants.
However, economists and critics have warned that granting selective financial benefits without introducing comprehensive pay structure reforms could lead to dissatisfaction among other government service groups and prompt similar demands for enhanced compensation.
Meanwhile, the Federal Cabinet has reaffirmed strict austerity measures for the fiscal year 2026–27. These include maintaining restrictions on the purchase of new government vehicles and durable goods, limitations on official foreign medical treatment expenses, and curbs on non-essential foreign travel.
Government meetings will continue to be limited to serving a single dish along with tea and biscuits. The cabinet has also authorized the Finance Division’s Austerity Committee to grant exemptions from these restrictions on a case-by-case basis.
In the past, such exemptions have reportedly been used to approve the purchase of official vehicles and office renovations for bureaucrats and government ministers, raising questions among critics about the consistent implementation of austerity policies.
