The federal cabinet had agreed to increase salaries of government employees by 30% to 35%.
The salaries of employees working in Grades 1-16 will be increased by 35% and employees of Grades17-22 will get a 30% release.
However, the increase will be made through ad-hoc relief allowance basis instead of changes to basic income structure.
Pensions for former government employees will also be raised by 17.5%.
Mileage allowance, orderly allowance, deputation allowance and special conveyance allowance for disabled will also be increased.
The decision was made in a meeting ahead of the budget session in the National Assembly.
Addressing the meeting, Prime Minister Shehbaz Sharif said that pensions and salaries must be increased to allow the ordinary person to survive inflation.