K-P unveils Rs2.12 trillion budget for FY26-27

The Khyber Pakhtunkhwa government has approved a Rs2.12 trillion budget for the fiscal year 2026-27. The budget

The Khyber Pakhtunkhwa government has approved a Rs2.12 trillion budget for the fiscal year 2026-27. The budget focuses on development spending, public relief measures and fiscal stability. It has been described by the provincial leadership as a people-friendly and growth-oriented financial plan.

The budget was approved in a cabinet meeting chaired by Chief Minister Sohail Afridi. The chief minister termed it a “revolutionary and prosperous” budget aimed at improving living standards and strengthening the provincial economy.

A 7 percent increase in salaries and pensions for government employees has been proposed. The minimum monthly wage has also been raised to Rs45,000 under the new financial plan.

The provincial government has allocated Rs524 billion for development projects under the Annual Development Programme. Current expenditure has been estimated at Rs1.645 trillion. Officials said the budget deficit for the upcoming fiscal year is projected at Rs48 billion.

The province expects Rs1.584 trillion from federal transfers, including a major share from the federal tax pool. Additional revenue is expected from war on terror funds, oil and gas surcharges, windfall levies and hydel profits. Own-source revenue has been estimated at over Rs182 billion.

Authorities said the province’s economic indicators have shown improvement. The gross provincial product has reached Rs11.88 trillion. Per capita income has also increased to Rs290,000. Officials claimed the province has maintained fiscal stability and achieved its surplus target in the outgoing year.

Major Sector Allocations

The education sector has received the largest share of Rs468 billion. Health has been allocated Rs334 billion. Law and order spending stands at Rs191 billion, including a major portion for police services.

Local government has been allocated Rs90 billion. Energy projects have received Rs42 billion. Agriculture has been given Rs29 billion, while the interior department will receive Rs29 billion. The budget also includes Rs35 billion for the merged tribal districts.

Key Development Projects

Several development initiatives have been included in the budget. These include Rs36 billion for the Peshawar Rehabilitation Programme. The Bus Rapid Transit project has been allocated Rs7.5 billion. The Khushhal Hazara Programme has received Rs4 billion.

The government has also allocated Rs2.5 billion for electric bikes and rickshaws. Rs2 billion has been set aside for interest-free loans for overseas job seekers. Another Rs2 billion has been earmarked for the Ehsaas Kisan Programme.

Medical Teaching Institution hospitals have been allocated Rs80 billion. The Ehsaas Mustahiq Programme will receive Rs15 billion. A small allocation has also been made for minority self-reliance initiatives.

New Tax Measures Proposed

The Finance Bill attached to the budget introduces new taxation measures. Taxes will be imposed on leased properties of Auqaf lands. A new tax has also been proposed on five-marla residential houses.

Commercial transport vehicles will face revised annual taxation. Rickshaws will be taxed at Rs1,000 per year. Four-seater vehicles will pay Rs1,500 annually. Six-seater vehicles will be taxed at Rs2,000.

Public transport vehicles will also be taxed on a per-seat basis. Hotels will be required to pay a 5 percent tax based on occupancy and room capacity.

Stricter enforcement measures have also been proposed. Businesses failing to register or file returns may face heavy fines. In some cases, imprisonment has also been proposed for non-compliance.