ISLAMABAD, June 9: Minister of State for Finance Omar Ayub Khan announced a 15 per cent increase in the salaries and pensions of government employees and subsidies on food items while presenting the budget for 2007-8 in the National Assembly on Saturday.

Other relief measures announced for the under-privileged in an election year include raising the minimum wage of unskilled labourers from Rs4,000 to Rs4,600 to enable them to fight the rising inflation.

“This budget has been prepared keeping in view the needs of workers, labourers and government employees,” he said, adding that the increase in pension was being given in two tiers: old pensioners would get 20 per cent raise while new would get 15 per cent.

Referring to the demand of the government’s clerical staff to upgrade their posts, he said: “The government has accepted this demand and employees in BPS 5, BPS 7 and BPS 11 are being promoted to BPS 7, BPS 9 and BPS 14, respectively.”

He said 87,500 federal government employees would benefit from the measure.

He said the government had decided to immediately construct 37,000 houses for the low-paid employees in Islamabad on ownership basis. In the first phase, construction of 5,000 units would begin immediately and the land would be provided by the Capital Development Authority at official rates. The employees would be offered the facility to get loan for construction of homes.

About 250,000 housing units would be constructed in five years under the low-cost housing scheme to be launched in collaboration with the provincial and district governments, for which loan from the House Building Finance Corporation would be available, he said.

The minister of state said the government had decided to upgrade the basic scale of railway employees by one step for the remaining 62,482 workers, excluding secretarial staff. The longstanding demand of railway employees regarding upgrading of posts had already been accepted with an increase in their allowances and 12,510 employees had benefited from the increase. “In this way, our government has provided relief to 74,992 railway employees and their long awaited demand has been met.”

Old age pension has been increased by 15 per cent and the minimum pension has been increased from Rs1,300 to Rs1,500 per month.

Worker’s widow shall get pension as per their deceased husbands’ entitlement. Earlier, they used to get the minimum pension.

Earlier, if a husband and wife both contributed to old-age benefit, the surviving one did not get the pension of the deceased spouse. Now the surviving partner shall get the pension of the deceased spouse.

All the workers, regardless of their wage level, will be entitled to compensation on account of disability caused during the course or as a result of performance of duty. Under the Workmen Compensation Act, 1923, workers receiving more than Rs6,000 per month were not entitled to the compensation.

Contract employees have been entitled to receive share in their companies’ profit under the Companies Profit (Workers Participation) Act, 1968. The limit of profit has been enhanced from Rs12,000 to Rs20,000.

The Workers Welfare Fund Ordinance, 1971, is being amended to allow industrial workers to get medical, education, housing and death grant from the fund for units having an annual income in excess of Rs500,000. The ordinance has been amended to increase the limit of death grant from Rs200,000 to Rs300,000.

Mr Ayub said the government was determined to protect people from price hike and it considered extending benefits to the poor segments of the society its mission.

He said the government had made allocation for subsidy worth billions of rupees.

“Daal chana, moong and mash, which are being sold in the market at Rs38, Rs56 and Rs72 per kg, respectively, will be sold in the Utility Stores at Rs29, Rs47 and Rs57, respectively. From tomorrow, there will be a per kg relief of Rs10, Rs5 and Rs5 on tea, sugar and rice, respectively,” he said.

He said the price of cooking oil was increasing rapidly in the international market but it would be sold at the Utility Stores at Rs67 per kg against the market price of Rs80.

“To enable all the citizens to benefit from the relief measures, it has been decided to increase the number of Utility Stores by 5,000 and provide a utility store in every union council in four months,” Mr Ayub said.