ISLAMABAD, April 21: The federal government is not expected to increase the salaries of public servants by more than 7 to 15 per cent owing to, what government claims, additional financial burden caused by higher oil import bill, it is learnt. A senior finance ministry official told Dawn on Thursday that the salaries of government officers (BPS-17 and above) were expected to be increased by 7-10 per cent. The salaries of other employees (below BPS-17) were likely to go up by about 15 per cent, he said.

However, this increase would be calculated after merging with salaries the two existing ad hoc allowances of 15 per cent each. The pensions are also proposed to be increased by 15 per cent in the next fiscal year (2005-06).

The official said the Pay and Pension Committee led by former secretary general finance Moeen Afzal had not finalized its report in its two-day meeting due to the absence of several members. The committee, he said, would submit the report to the prime minister by early next month.

The committee has, however, recommended doing away with the medical allowance for the government employees across the board and replacing it with a new health insurance scheme.

He said the house rent ceiling, frozen on the 1994 level, would be revised according to the 2005 salaries.

Earlier hopes of 25-30 per cent increase in the salaries of government servants was no more a viable option at least for the next financial year because of rising oil import bill, he added.