Key points
- No new taxes; taxpayer base to be expanded
- Federal transfers projected at Rs. 1,506.92 billion
- Development budget set at Rs. 547 billion
- Sehat Card programme receives Rs. 41 billion allocation
- Education budget increased to Rs. 363 billion
- Health sector funding raised by 19 per cent
- Minimum wage raised to Rs. 40,000 per month
- Salaries, pensions up by 10 per cent and 7 per cent respectively.
PESHAWAR: Khyber Pakhtunkhwa Minister for Law Aftab Alam on Friday presented the provincial budget for fiscal year (FY) 2025–26, unveiling a total outlay of Rs. 2,119 billion, with projected expenditures amounting to Rs. 1,962 billion.
Khyber Pakhtunkhwa has projected total revenue of Rs. 1,506.92 billion from federal sources in the upcoming fiscal year. This includes Rs. 1,147.76 billion expected from federal tax assignments, Rs. 137.91 billion as the one per cent share for terror-affected provinces, Rs. 57.11 billion from oil and gas royalties, Rs. 58.15 billion from the windfall levy on oil, Rs. 34.58 billion under Net Hydel Profit (NHP), and Rs. 71.41 billion in NHP arrears.
In addition to federal receipts, the province anticipates Rs. 129 billion in own-source revenue and Rs. 10.25 billion under rom miscellaneous revenue streams. Grants for the merged districts, covering both current and development needs, are estimated at Rs. 292.34 billion, while foreign aid and loans are expected to bring in Rs. 177.18 billion.
Spending priorities detailed
On the expenditure side, Khyber Pakhtunkhwa has allocated Rs. 1,255 billion for salaries, pensions, and non-salary operational costs. Salaries and pensions specifically for the merged districts amount to Rs. 160 billion, and Rs. 547 billion has been earmarked for development expenditures.
Of the development budget, Rs. 92.74 billion is for Accelerated Implementation Programme (AIP) and Rs. 39.60 billion for Annual Development Programme (ADP) in the merged districts. The flagship health insurance initiative, Sehat Card, has been allocated Rs. 41 billion — Rs. 35 billion for settled areas and Rs. 6 billion for merged areas.
The government stated that no new taxes will be introduced, but the number of taxpayers will be increased. The minimum monthly wage has been raised from Rs. 36,000 to Rs. 40,000.
Focus on key sectors
The Khyber Pakhtunkhwa budget has allocated significant increases across key sectors, reflecting the government’s focus on public welfare and infrastructure development.
The health budget has been raised by 19 per cent — from Rs. 232 billion to Rs. 276 billion — with plans to establish cardiology satellite centres in Mardan and Bannu to enhance specialised healthcare access.
Education continues to receive substantial attention, with its budget increasing by 11 per cent from Rs. 323 billion to Rs. 363 billion. The focus will be on improving classroom facilities, providing learning materials, and promoting extracurricular activities for 5.9 million students across 32,500 schools.
In the higher education sector, funding has been increased from Rs. 36 billion to Rs. 50 billion, while public universities have seen their allocations more than triple — from Rs. 3 billion to Rs. 10 billion.
The police and security sector will receive Rs. 158 billion, marking a 27 per cent increase from last year’s Rs. 124 billion. This includes Rs. 13 billion earmarked for the procurement of new weapons and vehicles, and the launch of a Safe City project aimed at improving urban security.
The Communications and Works Department has received the highest percentage increase, with its allocation soaring by 70 per cent — from Rs. 72 billion to Rs. 123 billion — signalling a strong push towards infrastructure development.
Law Minister Aftab Alam also presented a supplementary budget of Rs. 240.01 billion for FY 2024–25. This included Rs. 192.74 billion in already incurred expenses and Rs. 47 billion in additional expenditures.
Post-budget briefing
During the post-budget briefing, Finance Adviser Muzzammil Aslam announced key adjustments in public sector compensation. He stated that government employees’ salaries will see a 10 per cent increase, while pensions will be raised by 7 per cent. The total salary bill for the upcoming fiscal year has been set at Rs. 680 billion, and Rs. 195 billion has been allocated for pensions. He stated that if no major infrastructure projects are launched, the province will not pursue new foreign loans in FY 2025–26.
By December 2024, Khyber Pakhtunkhwa’s external debt had reached Rs. 709 billion. To manage repayments, a Debt Servicing Fund of Rs. 150 billion has been established, which is currently earning Rs. 60 million in daily profit. This fund is expected to generate Rs. 17–18 billion annually.
The government will spend a total of Rs. 172 billion on law and order. Of the Rs. 547 billion development budget, Rs. 278 billion is part of the provincial ADP. So far this year, approximately Rs. 200 billion has been spent on development.
For the first time, the federal government has approved the release of Rs. 70 billion in development funds for the merged districts. Pending arrears are expected to be cleared by the end of the month. The total number of development projects this year has reached 2,159, including 810 new schemes.
Dissatisfied opposition
The Khyber Pakhtunkhwa Assembly session began after a delay of nearly three hours. As the session was getting underway, sudden commotion erupted at the main entrance of the assembly hall. Around 20 opposition members entered the hall chanting slogans against the ruling Pakistan Tehreek-e-Insaf (PTI).
The lawmakers held placards criticising PTI and its founding chairman. Instead of taking their seats, they stood in the centre of the assembly floor and began loud protests.
In reaction, PTI lawmakers and ministers also retaliated, responding with chants against the Pakistan Muslim League-Nawaz (PML-N) and the Pakistan Peoples Party (PPP). After a few minutes of back-and-forth sloganeering, the members eventually returned to their seats.
Speaking to the WE News English, Pakistan Peoples Party parliamentary leader in the Khyber Pakhtunkhwa Assembly, Ahmed Karim Kundi, said that the government’s current and non-salary expenditures have exceeded Rs. 1,200 billion, which is alarming.
“The Rs. 547 billion development allocation is exaggerated and Rs. 45 billion claimed for District ADPs won’t be transferred to local governments. Moreover, Rs. 42.74 billion allocated for tribal areas is purely hypothetical — Punjab, Sindh, and Balochistan have never committed to paying it.”
Jamiat Ulema-i-Islam Fazl (JUI-F) lawmaker Adnan Wazir also slammed the budget, saying, “The budget is full of deceptive figures. The Chief Minister has proposed Rs. 54 billion for multi-sectoral development and Rs. 53 billion for road infrastructure, under block allocations. These funds will be entirely at the Chief Minister’s discretion and will be used as political bribes.”
