The Punjab Assembly on Monday approved a 10 per cent increase in the salaries of government employees and a 5 per cent hike in pensions for retired officials as part of the provincial budget for the fiscal year 2025–26.

The decision, announced by Finance Minister Mian Mujtaba Shuja-ur-Rehman during the budget session, comes as part of a broader effort by the PML-N and PPP coalition government to provide financial relief to public sector workers in the face of persistent inflation and economic uncertainty.

“The government recognises the financial strain on employees and pensioners and has responded with a responsible and compassionate increase,” said Mr Shuja-ur-Rehman while presenting the budget.

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The 10pc salary hike will be applicable to all provincial government employees, while retired public servants will receive a 5pc increment in their monthly pensions. The increases are part of the Rs2,706.5 billion non-development expenditure allocation, which also includes funding for salaries, pensions, and administrative costs.

These measures were passed alongside other major development initiatives, including Rs72 billion for the Nawaz Sharif Cancer Hospital in Lahore and Rs148 billion for education sector development — which features new classroom construction and expanded scholarship programmes.

The budget was presented amid protests by opposition members, who raised slogans and criticised the budget as "inadequate" and "politically driven." However, treasury benches maintained that the approved allocations reflect a commitment to public welfare despite fiscal constraints.