KP suggests 10% pay raise, 7% pension increase for government employees

In the midst of opposition benches, Khyber -Pakhtunkhwa (KP) presented a RS2.119 Billion excess budget for the financial year 2025-26 in the provincial assembly and described it as a historical step towards economic recovery after doing what called an economically curled province.

The provincial government claimed that the budget not only reflects sound fiscal management, but also relates to critical development, wages, pension and debt treatment needs despite significant financial restrictions and unpaid taxes from the federal government.

The session with the KP assembly, the chairman of the Speaker Babar Saleem, began with the budget presentation of the Minister of the Aftab Alam law, which also has the portfolio for financing.

He said that when chief minister Ali Amin Gandapur took responsibility, the province’s financial state was serious because of what he described as “incorrect management of the constitutional jail.”

He added that the Treasury hardly had enough funds to cover wages in 15 days, large development projects had stopped, the health card scheme had been interrupted, wheat reserves were inadequate to meet provincial needs, and the province was saddled with mounting debt.

The Minister of Finance noted that, despite these circumstances, the provincial government not only achieved, but exceeded its profits, terming it the greatest profits in the history of the province, adding that the government now has sufficient reserves to pay wages for three months.

He also claimed that the budget surpasses the combined profits from several previous years.

During the current financial year, the government invested RS150 billion in a provincial development fund – an amount equal to about 20 percent of the province’s total debt portfolio. It also repaid RS49 billion in outstanding loans, which included RS18 billion in interest payments.

The total expenses for the next financial year are estimated at RS1,962 trillion against expected revenue on RS2,119 trillion, creating an expected profit of RS157 billion.

The budget estimates RS177 billion in foreign assistance through grants. The allocation for current expenses, including wages, pensions and operating costs, is on RS1,415 trillion. Of these, RS1,255 trillion is earmarked for the wounded districts, while RS160 billion will go to the merged tribal districts.

The annual development program (ADP) has been proposed for RS547 billion. The government said this additional RS35 billion was used to ensure timely implementation of priority development schemes.

With regard to fiscal relief, the provincial government proposed an increase of 10 percent in wages and a seven percent increase in pensions for government employees, while also announcing an increase of 15 to 20 percent of difference for those who do not receive executive quotas.

Minimum wage in the province must be raised from RS36,000 to RS40,000 per year. Month. Tax relief measures include the reduction of stamp duty and property transfer tax from two percent to one percent offering exceptions to taxes for properties up to 4.9 Marlas and lowering the hotel bed tax from 10 percent to seven percent.

Professional tax has been abolished for individuals who earn up to RS36,000 per year. Month. In addition, the registration fee and the token tax on electric vehicles are waived.

The government also proposed to adapt the wages for the KP police staff with the Punjab police. Shuhada (martyrs) package for police officers – from constables to inspectors – is proposed to be increased from RS10 million to RS11 million.

In the education sector, RS4.6 billion has been released to public universities, and RS4.9 billion in Development Funds has been awarded to higher education. In the merged districts, the government reconstructs 46 colleges at a price of RS1.55 billion.

A recruitment drive has been launched to complete 16,000 teaching positions, while 3.4 million textbooks were distributed and 518,000 scholarships were awarded in the current financial year.

Budget documents reveal that the province is facing a deficit of RS267 billion under the National Finance Commission (NFC) Award. The federal government also owes RS71 billion in net shelf surplus and RS58 billion in oil and gas royalties. Grants for foreign assistance are expected to contribute RS177 billion in the coming financial year. The provincial income target is set to RS129 billion.

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Previously, the budget session was characterized by disturbance from opposition parties. When CM Gandapur entered the assembly hall, government members welcomed him with the desk, while opposition legislators shouted slogans such as. “Ali Baba Chalees Chor”.

Some members carried posters with slogans accusing the government of corruption. PML-n MPA Sobia Shahid brought a bug into the house and blew it during the session. In response, State Treasures stood and shouted counter -slogans. Speaker Babar Saleem requested opposition leader Dr. Ibadullah to intervene, after which the opposition benches resumed the order.

During the session, the KP assembly also adopted a decision that expressed solidarity with Iran in the light of recent Israeli aggression.

In his closing remarks, the Finance Minister said KP had suffered decades of militant conditions and that strengthening the police force remained a priority, noted a significant increase in the police budget aimed at the purpose of protecting the strength of modern weapons, protective equipment and surveillance equipment.

He also acknowledged that the restoration of the SEHAT card scheme remained under consideration and was conditioned by fiscal space.