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KP govt to present Rs2trn budget today
PESHAWAR: The KP government is set to unveil its provincial budget of Rs 2,000 billion for the next fiscal year 2025-26, with over Rs 1800 billion allocated for current expenditures.
A sum of Rs 433 billion will be allocated under the Annual Development Programme, 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, the sources said.
A surplus budget Rs 180 billion will be presented. According to the sources, KP has set a target of 40% growth in tax revenue once again.
No new tax to be introduced and focus will be on broadening the tax base and improving enforcement, sources added.
Additionally, Rs 50 billion will be earmarked for the Accelerated Implementation Programme (AIP), Rs 175 billion for foreign project assistance, and Rs 29 billion under the Public Sector Development Programme (PSDP).
Around 500 new development schemes will also be introduced under the annual development programme for next fiscal year.
The provincial budget for next fiscal year 2025-26 will be presented during a special session of the budget on Friday (today), at 3:00 pm.
According to the sources, the provincial expenditure for the upcoming year is estimated at Rs 1,800 billion.
Major allocations will go toward education and the Sehat Card programme, signaling a strong focus on public welfare, the sources said.
While there is no salary increase proposed in the new budget, a reduction in income tax on salaries is under consideration, the sources added.
The budget included several initiatives to support vulnerable, marginalised, 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 Rs 100,000 to Rs 150,000.
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 Rs 195 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 prioritise 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 Rs 1,342.78 billion to Khyber Pakhtunkhwa from the divisible pool for FY2025-26, raising the province's overall budget to approximately Rs 2,000 billion. The revised allocation for FY2024-25 stood at Rs 1,135.66 billion, lower than the expected Rs 1,221.53 billion.
The merged tribal districts will receive a Rs 40 billion subsidy in the energy sector, a decrease from Rs 65 billion in the current fiscal year.
Additionally, the federal government will provide Rs 80 billion in special grants to these areas, up from Rs 66 billion allocated last year. Under the Public Sector Development Programme (PSDP), the merged districts will receive Rs 65.44 billion, compared to Rs70 billion in the current year.
According to Advisor to the Chief Minister on Finance, Muzzammil Aslam, a 40% rise in tax revenue this year.
The budget is also likely to propose cuts in property tax and introduce various welfare schemes.
These include solarisation projects and emergency funds for education and health.
A 10% increase in tobacco cess has been recommended as well, according to sources.
Copyright Business Recorder, 2025
