The Khyber-Pakhtunkhwa government is set to unveil a Rs2,000 billion budget for the upcoming fiscal year, with over Rs1,800 billion allocated for current expenditures. The budget will show a surplus of Rs180 billion, and while it will not introduce new taxes, the scope and rate of existing taxes will be expanded.
A significant portion of the budget, Rs433 billion, has been earmarked for development projects, including funding for the newly merged tribal districts. As part of the new fiscal year’s initiatives, the government will declare an “education emergency” and provide furniture to 100% of public schools.
In an effort to boost its revenues, the province has set a target to increase provincial tax collection by 40% compared to the current fiscal year. The new budget also includes plans for establishing four additional cardiac centers, as well as special funding for the merged districts.
The budget includes several initiatives to support vulnerable, marginalized, and low-income populations. Key infrastructure and welfare projects, such as the Peshawar-DI Khan Motorway, a new electricity transmission line, and the establishment of an insurance company, will receive funding.
Additionally, Safe City projects in Peshawar, Bannu, and DI Khan will be supported financially, and the education budget will be increased by 13%. Furthermore, the monthly honorarium for artists will rise from Rs100,000 to Rs150,000.
A significant focus of the development budget will be on completing ongoing projects. Priority will be given to projects that are 80% or more complete, followed by those at 60% completion. The number of new development projects will be capped at 500, with Rs195 billion to be immediately released and up to Rs250 billion allocated as needed. A special committee will be formed for approving projects based on priority and necessity.
The budget will continue to prioritize the education, health, and social welfare sectors, while the 13-year throw-forward period for the Annual Development Program (ADP) will be reduced to seven years. A new safari park in Misri Banda, Nowshera, is also part of the fiscal year’s plans.
The federal government is expected to allocate Rs1,342.78 billion to Khyber-Pakhtunkhwa from the divisible pool for FY2025-26, raising the province’s overall budget to approximately Rs2,000 billion. The revised allocation for FY2024-25 stood at Rs1,135.66 billion, lower than the expected Rs1,221.53 billion.
The merged tribal districts will receive a Rs40 billion subsidy in the energy sector, a decrease from Rs65 billion in the current fiscal year. Additionally, the federal government will provide Rs80 billion in special grants to these areas, up from Rs66 billion allocated last year. Under the Public Sector Development Programme (PSDP), the merged districts will receive Rs65.44 billion, compared to Rs70 billion in the current year.
