KP govt proposes 10% salary, 7% pension hike in Rs2.1 trillion budget

Peshawar: The Khyber Pakhtunkhwa (KP) government has presented a surplus budget of Rs2,119 billion for the fiscal year 2025–26 in the provincial assembly. The Annual Development Programme (ADP) has been set at Rs547 billion.

The KP Assembly session, chaired by Speaker Babar Saleem, saw Law Minister Babar Saleem presenting the budget.

According to the budget documents, total expenditures are estimated at Rs1,962 billion, leaving a surplus of Rs157 billion. The development programme has been allocated Rs547 billion.

The KP government has proposed a 10% increase in salaries for government employees and a 7% increase in pensions. A 15–20% increase has been proposed in the disparity allowance for employees not receiving executive allowance.

As per the government’s announcement, the minimum monthly wage across the province has been raised from Rs36,000 to Rs40,000.

According to the budget documents, the province is facing a shortfall of Rs267 billion under the NFC (National Finance Commission). The federal government owes KP Rs71 billion in net hydel profit and Rs58 billion in oil and gas royalties. Additionally, the province is estimated to receive Rs177 billion in foreign aid grants.

For salaries and other current expenditures, Rs1,415 billion have been allocated. Of this, Rs1,255 billion is proposed for settled districts and Rs160 billion for merged tribal districts. Revenue generation is projected at Rs129 billion.

In taxation, the stamp duty on residential and commercial property allotment and transfer has been reduced from 2% to 1%. A tax exemption has been proposed for 4.9 marla residential and commercial properties. Hotel bed tax is proposed to be reduced from 10% to 7%.

The budget also proposes abolishing professional tax for individuals earning up to Rs36,000 per month. Additionally, registration and token tax exemptions have been proposed for electric vehicles.