In a major development, the federal cabinet has approved an 85 percent increase in the rental ceiling for government employees from BS-1 to BS-22, covering Islamabad and five major cities — Rawalpindi, Lahore, Karachi, Peshawar, and Quetta.
The decision brings long-awaited relief to thousands of civil servants struggling with rising housing costs amid record inflation.
🏛️ Ministry of Housing Proposed the Hike
According to official sources, the Ministry of Housing and Works initiated the proposal, highlighting that existing rent ceilings were no longer aligned with current market rates. The last revision took place on September 28, 2021.
The ministry noted that urban rents have surged sharply in recent years due to population growth and limited housing supply, making it increasingly difficult for employees to secure accommodation within their allotted rent ceilings.
💬 Employees Forced to Pay Out of Pocket
The ministry reported that government employees were often covering rent differences from their own salaries because of the gap between official ceilings and actual rents.
Adding to the pressure is a shortage of government-owned housing, forcing more employees into the private rental market.
💼 Finance Division Endorsed the Proposal
Acknowledging these financial challenges, the Ministry of Housing sought the Finance Division’s concurrence to revise the ceilings. The Finance Division endorsed the proposal, agreeing that an 85% across-the-board increase was justified given current market trends.
“In view of the market situation and Finance Division’s concurrence, it is proposed that the rental ceiling for hiring of residential accommodation be enhanced by 85% with immediate effect,” the Ministry stated.
✅ Prime Minister & Cabinet Approve Increase
The proposal was formally placed before the Federal Cabinet with the Prime Minister’s approval under Rule 17(1)(b) of the Rules of Business, 1973, and has now been officially sanctioned.
With this decision, government employees can expect immediate relief, as the updated rental ceilings will bring housing allowances closer to market rates, reducing their financial burden significantly.
📊 Key Highlights
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📅 Last Revision: September 28, 2021
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💸 New Increase: 85% in rental ceilings
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🏢 Applies To: BS-1 to BS-22 (Federal employees)
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🌆 Cities Covered: Islamabad, Rawalpindi, Lahore, Karachi, Peshawar, Quetta
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✅ Approved By: Federal Cabinet & Prime Minister
🧾 Summary
This increase marks one of the largest rent ceiling hikes in Pakistan’s federal service history, directly benefitting thousands of civil servants who have faced rising accommodation costs for years.
Officials believe the decision will boost employee morale and improve retention within federal departments, aligning compensation more closely with current economic realities.
