Khyber Pakhtunkhwa Budget 2025–26: Rs 2.119 Trillion Surplus Budget Focuses on Salaries, Development, and Fiscal Prudence
The Khyber Pakhtunkhwa (KP) government presented a Rs 2.119 trillion surplus budget for FY 2025–26 with no new taxes, a 10% salary increase, and a 7% pension hike for government employees. Finance Minister Aftab Alam announced that the province expects Rs 2.276 trillion in revenues, with total expenditures of Rs 1.962 trillion, resulting in a Rs 157 billion surplus.
Revenue Sources and Allocations
Key revenue streams include:
- Rs 1,506.92 billion from federal receipts
- Rs 129 billion in provincial own receipts
- Rs 83.5 billion in tax receipts
- Rs 45.5 billion in non-tax receipts
- Rs 291.34 billion from merged districts
- Rs 177.18 billion in federal project assistance
Additional receipts include:
- Rs 137.91 billion from the 1% divisible pool on war on terror
- Rs 57.11 billion in gas and oil royalty
- Rs 58.15 billion as windfall levy on oil
- Rs 34.58 billion from current year net hydel profits
- Rs 71.41 billion in net hydel profit arrears
Expenditure Focus and Relief Measures
The government has emphasized austerity and financial prudence while protecting essential services. No new taxes have been introduced, with a broadened tax base instead.
Foreign-Funded Development Budget
The KP government has finalized a Rs 177.52 billion foreign-funded development budget for FY 2025–26 to support 50 key projects with support from the World Bank and Asian Development Bank. This is up from Rs 112.14 billion in the current year. Major allocations include:
- KP Road Accessibility Project – Rs 28.10 billion
- KP Rural Roads Development – Rs 22.40 billion
- KP Cities Improvement Project – Rs 18.20 billion
- Balakot Hydropower Project – Rs 11.20 billion
- Integrated Tourism Development – Rs 8.40 billion
- Madyan Hydropower Project – Rs 7 billion
- Irrigation and Drainage Rehabilitation – Rs 7 billion
- National Health Support Program – Rs 6.44 billion
- Non-DHQ Hospital Revamping – Rs 5.60 billion
- Gabral-Kalam Hydropower Project – Rs 5.60 billion
- Human Capital Investment (Health) – Rs 5.88 billion
- Human Capital Investment (Education) – Rs 5.04 billion
- KP Rural Investment Program – Rs 4.20 billion
- FATA Infrastructure Program – Rs 3.92 billion
- Rural Economic Transformation – Rs 3.92 billion
- Food Security Support Project – Rs 3.08 billion
These projects focus on improving infrastructure, energy, tourism, education, and healthcare services in the province. With support from international donors, the KP government aims to achieve inclusive and long-term development.
