ISLAMABAD - The government in the budget on Tuesday announced Rs 2000 increase in minimum wage rate taking it to Rs 12000 from existing Rs 10000.

Finance Minister Ishaq Dar in his budget speech said that minimum wage has been increased by Rs 2000. On the other hand, the government also announced to give "10 per cent ad-hoc relief to all federal government employees with effect from 1st July 2014."

"As you know, we are still in the stabilization mode as we are focusing on reducing public expenditures. However, it is imperative that we do the bare minimum that is possible within the limited resources available especially for lower grade employees", Dar said.

The measures include, 10 per cent increase for employees in Grade-1 to 15 drawing fixed medical allowance of Rs.1000 per month which makes an increase of mere Rs 100; 5 per cent increase will be allowed in conveyance allowance to those employees working in Grade-1 to 15; the post of superintendent is being upgraded from Grade-16 to Grade-17; One pre-mature increment will be allowed to employees of Grade-1 to 4.

While talking about the pensions, the minister said that last year the government had raised the minimum pension for government employees from Rs.3000 per month to Rs.5000, representing an increase of 67%.

Public sector workers and pensioners seemed disappointed with the 10 percent increase in their salaries and pensions.

"First, one needs to understand that 10 percent increase means only for basic salary. I am a grade 16 worker and draw Rs 27,000 salary but my basic pay is around Rs 10,000. So, for me it is only around Rs 1,000 increase," said Muhammad Adil, 38, a government employee.

Talking to The Nation, Dr Abid Qayyum Sulehri, political economist and executive director SDPI, said that 10 percent increase in salaries of public sector employees would create least impact.