Major Relief for Government Employees
The Government of Pakistan has approved a significant 85% increase in the house rent ceiling for federal government employees, offering long-awaited relief to civil servants struggling with rising living costs.
According to official sources, the decision was made through a circulation summary approved by the federal cabinet, ensuring that all government employees — from Grade 1 to Grade 22 — will benefit equally from the increase.
The Ministry of Housing and Works had earlier presented the proposal to the cabinet, which has now been formally approved. This measure is expected to place an additional financial burden of approximately Rs 12 billion on the national exchequer.
Addressing Inflation and Cost of Living
Government officials described the decision as a response to growing inflation and mounting rental expenses, particularly in major cities like Islamabad, Lahore, and Karachi, where housing costs have surged sharply over the past few years.
Pakistan’s inflation rate has remained high, hovering around 23–25% in 2024, driven by escalating food, fuel, and utility prices. Rent, in particular, has become a major concern for salaried workers, with urban housing costs increasing by nearly 30% in the last two years, according to the Pakistan Bureau of Statistics.
By raising the housing allowance, authorities aim to help employees manage their household expenses more effectively and cushion the impact of inflation.
Long-Standing Demand Finally Met
The increase in house rent ceiling fulfills a long-standing demand from federal employees, who have been urging the government to adjust allowances in line with market realities. For many, stagnant salaries combined with rising rents had made it increasingly difficult to secure decent accommodation near workplaces.
Officials from the Ministry of Housing noted that this decision reflects the government’s commitment to employee welfare and quality of life. The revised allowance, they added, would ease financial stress and improve overall morale across the public sector.
Broader Implications
While the move has been widely welcomed by government employees and unions, some analysts caution that it could add fiscal pressure to Pakistan’s already strained budget. However, supporters argue that the social and economic benefits — including improved employee productivity and stability — outweigh the costs.
In a period of persistent economic uncertainty, this measure represents a significant step toward supporting Pakistan’s public workforce, offering both financial relief and recognition of their service amid tough economic times.
