In a pivotal and politically charged moment, Finance Minister Muhammad Aurangzeb presented his inaugural federal budget for the fiscal year 2024-25 on Wednesday, as Pakistan endeavors to secure a crucial long-term bailout from the International Monetary Fund (IMF).
Addressing the National Assembly, Aurangzeb underscored the government’s economic strides amidst significant financial and political hurdles over the past year. “The government’s progress on the economic front has been notable,” he affirmed in his opening statements.
The government has proposed a raise in the minimum wage from the current Rs32,000 to Rs36,000 in a bid to mitigate the inflationary pressure on citizens. According to the finance minister, the purchasing power of the populace has been impacted by rising inflation, prompting proactive measures to tackle the issue.
A prominent feature of the budget announcement was the federal cabinet’s endorsement of substantial salary increments for government employees. Those in Grades 1 to 16 will witness a 25 per cent salary hike, while employees in Grades 17 to 22 will experience a 20 per cent raise. Moreover, pensions for retired employees will see a 22 per cent increase.
Reflecting on the nation’s recent economic tribulations, Aurangzeb reminisced about a period when Pakistan’s economy was in dire straits. “The State Bank’s reserves were sufficient for less than two weeks of imports, the rupee depreciated by 40 per cent, economic progress was stagnant, and inflation was propelling more people below the poverty line rapidly,” he recalled. “Emerging from this situation seemed nearly insurmountable.”
The finance minister also lauded the previous government for securing a short-term standby agreement with the IMF, attributing it to bringing economic stability and averting uncertainty during a critical phase when the preceding IMF programmed was concluding, and negotiations for a new one were uncertain.
As Pakistan confronts these economic challenges, the newly unveiled budget along with the associated salary and pension increments are perceived as indispensable measures to stabilize the economy and fulfill IMF expectations, thereby laying the groundwork for future growth and stability.
