KP offers an increase in wages of 10%, a 7% increase in pensions for government employees

In the midst of the demonstrations of the opposition benches, the government of Khyber-Pakhtunkhwa (KP) presented on Friday an excess budget of RS2.119 Billions for the financial year 2025-26 in the provincial assembly, describing it as a historic stage towards economic resumption after having inherited what it called a financial province.

The provincial government said that the budget not only reflects good budget management, but also meets the critical needs of development, salary, pension and debt despite significant financial constraints and unpaid contributions from the federal government.

The session of the KP assembly, chaired by President Babar Saleem, began with the budget presentation of the Minister of AFTAB Alam, who also holds the portfolio for finance.

He said that when Minister of Chief Ali Amin Gandapur had taken care of, the province’s financial situation was disastrous because of what he described as “poor management of the configuration of the unconstitutional goalkeeper”.

He added that the Treasury barely held enough funds to cover 15 days of wages, that major development projects had stopped, the health card program had been interrupted, wheat reserves were insufficient to meet provincial needs and the province was struggling with growing debts.

The Minister of Finance noted that despite these circumstances, the provincial government has not only reached but exceeded its excess objective, which qualified it the most important excess in the history of the province, adding that the government now has enough reservations to pay salaries for three months.

He also said that the budget surpasses the combined surpluses of several previous years.

During the current financial year, the government has invested 150 billion rupees in a provincial development fund – an amount that is equivalent to around 20% of the province’s total debt portfolio. He also reimbursed 49 billion rupees of loan in circulation, which included 18 billion rupees of interest payments.

The total expenditure for the next fiscal year has been estimated at RS1.962 Billions, against expected income from RS2.119 Billions, creating a planned surplus of 157 billion rupees.

The budget estimates that 177 billion foreign aid rupees through grants. The allocation of current expenses, including wages, pensions and operational costs, amounts to RS1.415 Billion. From this, RS1.255 Billion was reserved for established districts, while 160 billion rupees will go to the tribal districts merged.

The annual development program (ADP) was offered to RS547 billion, including 155 billion rupees for district established within the framework of the more enlarged ADP frame, which reflects an increase of 30% compared to previous allowances. The government said that this additional RS35 billion had been used to ensure the appropriate completion of priority development plans.

In terms of budgetary reparation, the provincial government has proposed a 10% increase in wages and an increase of seven percent of pensions for government employees while announcing a 15 to 20% increase in the relaxation of disparities for those who do not receive management allowances.

The minimum wage in the province must have gone from RS36,000 to Rs40,000 per month. Tax relief measures include the reduction in stamp duties and the tax on ownership of 2% to one percent, offering tax exemptions for properties up to 4.9 marlas, and reducing the hotel tax of the hotel from 10% to seven percent.

Professional tax was abolished for people winning up to Rs36,000 per month. In addition, the registration fees and the token tax on electric vehicles have been canceled.

The government has also proposed to align the wages of the police personnel in KP with those of the Punjab police. The Shuhada (Martyrs) package for police officers – from police officers to inspectors – should have gone from 10 million rupees to RS11 million.

In the education sector, 4.6 billion rupees were published for public universities and 4.9 billion rupes in development funds were allocated to higher education. In merged districts, the government rebuilt 46 colleges at a cost of Rs1.55 billion.

A recruitment campaign to fill 16,000 teaching positions was launched, while 3.4 million manuals were distributed and 518,000 scholarships were granted during the current financial year.

Budgetary documents reveal that the province is faced with a deficit of 267 billion rupees under the National Finance Commission (NFC). The federal government also owes 71 billion rupes of net profits of Hydel and 58 billion rupees of oil and gas royalties. Foreign assistance subsidies should contribute to 177 billion rupees during the coming fiscal year. The objective of provincial income has been set at Rs129 billion.

Read also: Sindh CM presents the RS3.45TR budget for 2025-26

Earlier, the budgetary session was marked by disturbances of the opposition parties. While the CM Gandapur entered the assembly room, members of the government welcomed it with bumping, while opposition legislators chanted slogans such as “Ali Baba Chalees Chor”.

Some members wore slogans accusing the government of corruption. PML-N Mpa Sobia Shahid brought into the house and exploded it during the session. In response, the members of the Treasury got up and shouted counter-slogans. President Babar Saleem asked the opposition chief, Dr. Ibadullah, to intervene, after which the opposition benches resumed order.

During the session, the KP assembly also adopted a resolution expressing solidarity with Iran in light of the recent Israeli aggression.

In his final remarks, the Minister of Finance said that KP had suffered from decades of activism and that the strengthening of the police had remained a priority, noted a significant increase in the police budget, aimed at equipping the force of modern weapons, protective equipment and surveillance equipment.

He also recognized that the restoration of the Sehat card system was under study and was subject to the budgetary space.