J. S. Rawat wrote:
> Is there any technique by which we can extract attribute (first
> instance) and make it processing instructions and process the tag as well.

I don't know how much more complex your real-world problem is than the
simplified one that you posted, but with your example I find it hard to
justify anything more complex than something like this.

<!-- not tested -->
<xsl:template match="*">
  <xsl:if
    test="@pg and (not(preceding::*[@pg])
      or @pg != preceding::*[@pg][1])">
    <xsl:processing-instruction name="p">
      <xsl:value-of select="@pg"/>
    </xsl:processing-instruction>
  </xsl:if>
  <xsl:element name="{local-name()}1">
    <xsl:apply-templates select="@* | node()"/>
  </xsl:element>
</xsl:template>

<xsl:template match="@pg"/>

This may be insufficient if page numbers don't strictly increase, or if
you need to break a text node in the middle (because it straddles a page).