PESHAWAR: The Khyber Pakhtunkhwa (KP) Cabinet has approved a Rs. 1.52 trillion budget for the fiscal year 2026-27, featuring a Rs. 48 billion deficit, extensive development spending, and relief measures for government employees and pensioners.
The budget was approved during a cabinet meeting held in Peshawar on Friday under the chairmanship of Chief Minister Sohail Afridi. Following the meeting, the chief minister formally signed the budget documents.
According to official details, the budget includes 902 development projects, while several tax adjustments have been proposed, including the abolition of certain taxes aimed at providing relief to citizens and businesses.
7.7% Salary and Pension Increase Proposed
The provincial government has proposed a 7.7 percent increase in salaries and pensions for government employees and retirees in the upcoming fiscal year.
Officials from the Finance Department stated that Rs. 225 billion has been earmarked for the Provincial Annual Development Programme (ADP), with an additional Rs. 150 billion expected through foreign-funded and donor-supported development projects.
Road Infrastructure Gets Highest Allocation
Infrastructure development remains a key focus of the budget, with the road sector receiving the largest allocation of Rs. 60 billion. The provincial government plans to undertake more than 2,500 development projects across various sectors during FY2026-27.
Federal Transfers and Terrorism Compensation
Khyber Pakhtunkhwa is expected to receive approximately Rs. 1.379 trillion from the federal government during the next fiscal year, similar to the allocation received in the current year.
Additionally, the province is projected to receive Rs. 139 billion under the special one-percent share granted to provinces affected by terrorism.
Rs. 50 Billion Allocated for Health Card Programme
The KP government has proposed Rs. 50 billion for the Health Card Programme in FY2026-27, reflecting a significant commitment to healthcare services.
Out of the total allocation, Rs. 43 billion has been reserved for settled districts, while Rs. 7 billion has been allocated for residents of the merged tribal districts. The Finance Department noted that Rs. 41 billion was allocated to the scheme during the current fiscal year.
Budget Debate Schedule Announced
The provincial assembly has allocated June 22, 23, 24, and 27 for budget discussions. The budget is scheduled to be passed on June 28, 2026.
Budget proceedings will remain suspended for four days due to Ashura holidays before lawmakers reconvene to complete deliberations and approve the financial plan.
