The federal government is currently reviewing four proposals for salary and pension increases in the upcoming 2025-26 budget, with final decisions expected during a cabinet meeting prior to budget day, according to Finance Ministry sources.

One of the key proposals includes a 30% disparity allowance for government employees in Grades 1 to 16. Another suggests a 10% increase in both salaries and pensions to help cushion the impact of inflation.

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Authorities are also considering merging one of the previous ad hoc allowances into the basic pay to streamline the salary structure. Additionally, a 15% increase in disparity allowance for all employees, from Grade 1 to 22, is on the table.

A separate recommendation proposes exempting armed forces personnel from the newly introduced contributory pension scheme.

Government allies have called on the Finance Ministry to implement substantial salary increases to provide relief for public sector employees struggling with the rising cost of living.