The federal government has decided to offer inflation-linked salary relief to public sector employees in the 2025–26 budget, while also planning bold measures to limit cash transactions, according to official sources.
The upcoming Finance Bill 2025 is expected to introduce several initiatives aimed at curbing cash-based purchases. One major proposal under review is an additional surcharge of up to Rs3 per litre on fuel bought with cash at petrol stations. The move targets both tax evasion and the problem of fuel adulteration.
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Government employees are simultaneously demanding significant salary hikes and allowances, pushing for the minimum monthly wage to be raised to Rs50,000. They have threatened to stage a protest outside Parliament on June 10 if their demands are not addressed.
Other suggested steps include a 2% additional tax on cash sales made by manufacturers and importers, along with extra levies on cash purchases from Tier-1 retailers. However, the government intends to maintain tax exemptions for debit and credit card payments at restaurants and will continue to promote digital payment methods at fuel stations, including QR codes, mobile wallets, and card transactions.
Despite the broader crackdown on cash dealings, insiders say there are no current plans to expand the tax net to sectors such as event management, jewellery, wedding services, or private practices like doctors and lawyers.
These policy shifts highlight the government’s push to foster economic transparency, boost digital transactions, and widen the tax base—while avoiding direct taxation of key professional and service industries.
