KP unveils Rs2.1 trillion budget with 10pc salary, 7pc pension increase

Khyber Pakhtunkhwa government Friday presented a surplus budget of Rs 2,119 billion in the assembly for the financial year 2025-26. The volume of the annual development program has been set at Rs 547 billion. 

The Khyber Pakhtunkhwa Assembly session began under the chair of Speaker Babar Saleem. Khyber Pakhtunkhwa Finance Minister Aftab Alam delivered the budget speech.

Khyber Pakhtunkhwa Finance Minister announced 10 percent raise in salaries of government employees and 7 percent increase in pensions. The Annual Development Program (ADP) was set at Rs547 billion. Finance Minister Aftab Alam highlighted a 74pc increase in non-tax revenue and reaffirmed the government’s commitment to public welfare. He claimed KP government considered the health sector a key pillar of its development strategy. Under Sehat Card programme, 4.4 million people have benefitted so far, and the initiative now covers 100% of the province’s population. 

It has been proposed to increase the disparity allowance of employees not receiving executive allowance by 15 to 20 percent. According to the budget document, the province is facing a deficit of Rs. 267 billion under the MFC.  On education, Aftab Alam said Rs4.9 billion has been allocated for higher education, with several new degree colleges established to improve access and quality.

He said KP government has surplus budget equal to three months salaries. He said development budget has been increased to 120 billion from 155 billion which showed an increase of 35 billion. He said KP government appointed 16000 teachers in previous fiscal year. 

Khyber Pakhtunkhwa Finance Minister said the size of the annual budget of KP government was set at Rs 2,119 billion and the expenditure were estimated at Rs 1,962 billion while the development budget has been kept at Rs 528 billion. KP Finance Minister said Rs 165 billion has been allocated for various projects in the form of subsidies. Rs 1390 billion allocated for ongoing expenses. Rs 680 billion has been earmarked for salaries, Rs 200 billion for pensions.  He said Rs520 billion allocated for non-salary expenses and 36 billion rupees subsidy has been proposed for health card scheme.  KP Finance Minister said the federal government owes Rs71 billion in net profit from electricity, Rs58 billion in oil and gas, while the province is estimated to receive Rs177 billion in foreign aid grants. 

According to the document, Rs 1415 billion has been allocated in the budget for salaries and other expenses, Rs 1255 billion is proposed for the ongoing expenses of the settled districts, Rs 160 billion for the tribal districts, and the revenue in the new year has been estimated at Rs 129 billion. 

Residential and commercial property allotment transfer and stop duty has been reduced from two percent to one percent. Tax exemption has been given on 4.9 marla residential and commercial property, it is proposed to reduce hotel bed tax from 10 percent to 7 percent, it is proposed to abolish professional tax on people with a monthly income of Rs 36,000, it is proposed to waive registration fees and token tax for electric vehicles.