PESHAWAR: The Khyber Pakhtunkhwa government has said it has plans to set up a pension fund to ease payment pressure on exchequer.

Finance secretary Shakeel Qadir Khan told reporters at the post-budget conference here that managing the increasing pension and salary budget had turned out to be a big challenge for the government and therefore, the government wanted to resolve it.

`In many countries, pension payments are made through a fund. We, too, plan to follow suit by creating a similar fund.

However, both the government and its employees will have to make contributions to it,` he said.

The budget estimates for the 2017-18 put the pension liability of the government at Rs53 billion against the current year`s Rs40.90 billion and salary`s at Rs218 billion against Rs189 billion claiming 70 per centof the current revenue expenditure.

About the increase in salary budget, Mr Shakeel said the government couldn`t keep the salaries `stagnant`.

`We want to ensure that salaries remain lower than the revenue receipts growth,` he said.

Mr Qadir said the government needed to extend its tax base, while the province would focus on the urban immovable property tax and land tax.

He said the KP government had retired its domestic debt, while its international liabilities had come to Rs195 billion.

The secretary said KP paid Rs13 billion as interest rate last year but the figure dropped to Rs8 billion in the current year, while the principal amount payment came down to Rs7 billion f rom Rs11 billion.

About the Rs25 billion domestic borrowing, he said the government had `space` to borrow.

He said through such borrowing could help the province execute development projects immediately and that the debts would be repaid after the centre received due share in the federal receipts.

Finance minister Muzafar Said, who was also in attendance, claimed that the PTI government had turned around the prov-ince`s economy in the four years of its tenure.

He said the budget was tax free and balanced one.

`In the development programme, our government has focused on ongoing projects so that the general public can quickly share their benefits,` he said.

The minister said the government increased education budget 19 per cent, health`s 31 per cent, police`s 21 per cent and agriculture`s 14 per cent in 2017-18.

He said the successive governments transferred Rs14 billion to the districts as development funds from 2001 to 2013 but the PTI government gave away Rs48 billion to the local bodies in just two years.

`We have allocated Rs28 billion for district governments in the 2017-18. The money will be in addition to the districts` own revenues,` he said.

Defending the increase in tax ratio, the minister said despite the province`s small tax base, the government didn`t impose any new tax and instead, it revised the ratio of the existing taxes.

He said the government had increased its employees` salary and pension 10 per cent, which would cost the exchequer Rs16.5 billion annually.