PESHAWAR: The Khyber Pakhtunkhwa (KP) government on Friday announced a Rs2.119 trillion surplus budget for fiscal year 2025-26, introducing no new taxes while raising government salaries and pensions. The session was marred by protests from opposition lawmakers, who alleged rampant corruption in the province.
Presenting the budget in the provincial assembly, Finance Minister Aftab Alam revealed that expenditures are estimated at Rs1.962 trillion, resulting in a projected surplus of Rs157 billion. He noted that the province would receive Rs292.34 billion from the federal government for the merged tribal districts, including allocations for current expenditures, development projects, and displaced persons.
Revenue and Expenditure Highlights
The KP government expects total receipts of Rs2.119 trillion, including Rs1.5 trillion from federal transfers, Rs129 billion from provincial revenues, Rs137.9 billion as KP’s war-on-terror share, and Rs71.4 billion from hydel profit arrears. Provincial tax revenues are projected at Rs83.5 billion, with non-tax revenues contributing Rs45.5 billion.
Expenditure plans include Rs1.255 trillion for settled districts, covering salaries, pensions, and development costs, while Rs160 billion is allocated for current expenditure in merged districts.
No New Taxes, Targeted Relief Measures
While avoiding new taxation, the government proposed several relief measures:
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Minimum wage raised from Rs36,000 to Rs40,000.
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Stamp duty on property transfers reduced from 2% to 1%.
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Property tax waived for plots up to 4.9 marlas.
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Hotel bed tax cut from 10% to 7%.
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Professional tax removed for those earning Rs36,000 per month.
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Continued tax exemptions for green transport and ex-FATA/PATA areas.
Key Sectoral Allocations
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Health: Rs276 billion (+19% from FY25), with Sehat Card Plus budget increased by 25% to Rs35 billion. Sehat Sahulat Programme in merged areas gets Rs6 billion.
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Education: Rs363 billion for elementary and secondary education (+11%). Rs5 billion earmarked for literacy and out-of-school children. Higher education allocation increased to Rs50 billion.
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Law & Order: Rs158 billion (+27% from last year). Rs13 billion for equipment and vehicles. Safe City Project expanded; martyr compensation raised significantly.
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Infrastructure: Rs547 billion set aside for development spending, including Rs195 billion for provincial ADP and Rs177 billion from foreign aid.
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Local Development: Rs55.39 billion allocated for rural development and municipal services. Rs2 billion for parks and Rs800 million for slaughterhouses in key districts.
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Livestock & Agriculture: Rs17 billion for dairy, cattle, and horse breeding projects.
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Youth, Sports & Social Welfare: Rs11.6 billion for youth and sports; Rs19.1 billion for Zakat and special education.
Police Reforms & Martyr Compensation
The government announced plans to bring KP police salaries in line with Punjab’s. Compensation for fallen officers has been increased significantly, ranging from Rs11 million to Rs21 million based on rank. Families will also receive residential plots ranging from 5 marlas to 1 kanal.
Call for Federal Support
Finance Minister Alam urged the federal government to convene a National Finance Commission (NFC) meeting to address development and non-development funding needs of the merged areas, emphasizing the importance of fiscal equity.
