The Khyber Pakhtunkhwa government will present its Rs 2.15 trillion budget for fiscal year 2026-27 today. The provincial government has decided against introducing new taxes. Instead, the budget focuses on economic growth, development spending, and public relief measures.
Officials allocated more than Rs 235 billion for the Annual Development Programme (ADP). Meanwhile, the province has set its own-source revenue target at Rs 182 billion. Budget estimates also rely on the Federal Board of Revenue (FBR) tax collection target of Rs 15.2 trillion.
Relief Measures and Development Focus
The government will increase salaries of public employees by seven percent. Additionally, it plans to raise the conveyance allowance for government workers. Officials also decided to reduce the infrastructure development cess from two percent to 0.75 percent.
The budget further proposes lower taxes on five-marla houses. As a result, more than 200,000 households could benefit from the measure. Moreover, the government plans to introduce loan schemes for students and Pakistanis seeking overseas employment.
Officials described the upcoming financial plan as a pro-growth budget. However, one official claimed federal grant approval depends on the assent of imprisoned Pakistan Tehreek-e-Insaf founder Imran Khan.
Budget Strategy and Spending Challenges
Earlier, the Finance Department estimated a Rs 2.3 trillion budget in its strategy paper. It projected Rs 1.6 trillion in federal tax transfers and Rs 150 billion in provincial revenue. The document also proposed significant allocations for merged districts and foreign-funded development projects.
The strategy paper highlighted slow development spending during the current fiscal year. Authorities spent only Rs 169 billion against the allocated Rs 547 billion. Nevertheless, the government expects stronger spending while maintaining fiscal discipline during the next financial year.
