Rs. 48 bn shortfall of KP budget to fulfilled through savings, no new tax imposed: CM KP

PESHAWAR, (APP - UrduPoint / Pakistan Point News - 19th Jun, 2026) Khyber Pakhtunkhwa Chief Minister Sohail Afridi on Friday said that shortfall of Rs. 48 billion in budget will be fulfilled through provincial savings.

Presenting the KP financial year 2026-27 budget titled “Khushal Khyber Pakhtunkhwa” before the Provincial Assembly, Chief Minister KP announced that the projected fiscal shortfall of Rs 48 billion would be financed through provincial savings, emphasizing that no new borrowing would be undertaken.

He outlined an broad fiscal framework focused on public welfare, economic resilience, human capital development, security enhancement, institutional reforms, and inclusive regional development.

With a total outlay of Rs 2.17 trillion, the budget allocates Rs 1,645.708 billion for current expenditures and Rs 524.292 billion for development spending and total receipts are projected at Rs 2.122 trillion.

The Chief Minister said that provincial revenues are estimated at Rs 182.410 billion, representing an increase of approximately Rs 50 billion over the previous fiscal year.

He further announced that no new taxes have been imposed in the FY 2026-27 budget, underscoring the Government’s commitment to supporting economic growth and providing relief to citizens and businesses.

The Chief Minister said that the budget has been structured around nine thematic pillars designed to accelerate socioeconomic progress while strengthening governance and service delivery across the Province.

Recognizing security and public safety as foundational prerequisites for development, the Government has significantly enhanced allocations for the police force, raising the sector’s budget to Rs 191.393 billion. Key investments include a Rs 14.5 billion Police Procurement Plan covering modern weaponry, bulletproof vehicles, armored personnel carriers, drones, and anti-drone systems.

Additional allocations include Rs 7.9 billion for operational support, Rs 1 billion for drone-enabled policing, expansion of Safe City projects across districts, and establishment of a state-of-the-art Forensic Science Laboratory in Peshawar.

He said education remains a central pillar of the Government’s development agenda, with total sector allocations increased to Rs 468.379 billion.

Major initiatives include the establishment of 72 Chief Minister Model Schools at a cost of Rs 10 billion, investments in school upgradation and teacher deployment, Rs 5 billion for out-of-school children initiatives, Rs 8.5 billion for free textbooks, Rs 10.34 billion under the Good Governance Roadmap for elementary and secondary education, Rs 3.29 billion for improving low-performing schools, Rs 360 million for the Taleem Card Programme, Rs 1.7 billion for strengthening primary-level teacher availability, and Rs 385 million for the Insaf Female and Orphan Education Card.

Parent-Teacher Council funding has also been enhanced to Rs 6.148 billion. In the higher education sector, grant-in-aid support for public sector universities has been increased to Rs 11.8 billion.

The budget includes establishment of the Khyber Institute of Applied and Modern Sciences and the Tribal Medical College, each at a cost of Rs 5 billion. Additional investments include construction of 14 new government colleges, a provincial internship programme worth Rs 1.5 billion, interest-free student loans amounting to Rs 2 billion, and a dedicated interest-free financing programme for agriculture graduates.

To advance institutional performance and citizen-centric governance, the Government has earmarked Rs 19.3 billion for governance reforms, transparency initiatives, digitization, public service delivery improvements, and broader institutional strengthening measures.

The budget also places special emphasis on the accelerated development of the merged districts. Allocations include Rs 29 billion under the Annual Development Programme, Rs 52 billion under the Accelerated Implementation Programme, and Rs 180 billion for current expenditures. An additional Rs 17 billion has been allocated for Temporarily Displaced Persons (TDPs).

The Chief Minister expressed concern over the non-release of Federal TDP funds since 2022 and called for urgent resolution of the issue.

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Healthcare allocations have been increased to Rs 334.8 billion, reflecting the Government’s commitment to universal access and quality healthcare services.

Major allocations include Rs 50 billion for Sehat Card Plus, Rs 14.263 billion for free medicines in public hospitals, Rs 80 billion for Medical Teaching Institutions, Rs 11 billion for revitalization of Basic Health Units and Rural Health Centres, and a project worth Rs 9.9 billion for upgrading Category-D hospital Jamrud into teaching facility.

The budget also include a project worth Rs 4 billion for a new General Hospital in Peshawar, Rs 200 million for free cancer treatment, and funding for continued recruitment of 2,819 doctors, dental surgeons, and nurses. Social protection remains a key priority.

The Government has allocated Rs 15 billion for the “Ehsaas Mustahiqeen Programme” and Rs 1 billion for the “Ehsaas Maa – New Life, New Hope” initiative, under which eligible mothers will receive financial support for the birth of their first two children. Funding has also been allocated for five new Zamung Kor complexes to expand child protection services across the Province.

The budget further includes dedicated welfare measures for journalists through two special projects with a combined allocation of Rs 1 billion. Local government allocations have been enhanced to Rs 90 billion, including Rs 22.2 billion in grants for local councils. Urban transformation initiatives feature prominently in the budget. Under the Peshawar Revitalization Plan, 29 projects worth Rs 120 billion have been incorporated.

These include construction of strategic underpasses, a new Ring Road, completion of Ring Road Missing Link Phase-III, a Level-II Flyover at the Ring Road–GT Road intersection, and underground relocation of electricity infrastructure. The Government has also allocated Rs 7.5 billion for BRT operational support and fleet expansion, a project worth Rs 4.9 billion for electric buses, Rs 2 billion for improving public transport in divisional headquarters, and Rs 2.5 billion in markup-free subsidies to promote electric bikes and rickshaws. Disaster resilience and climate adaptation remain important priorities, with Rs 12 billion allocated for a dedicated Natural and Emergency Disaster Risk Management Fund. Additional investments include Rs 22.7 billion for water resource conservation, Rs 12.7 billion for clean drinking water projects, and Rs 13 billion for household solarization in merged districts.

Regional development initiatives include a Rs 5 billion infrastructure package for Upper Chitral, Rs 31.5 billion under the Rokhana Tribal Package in merged districts and sub-divisions, Rs 200 million for the Ehsaas Naujawan Programme in merged districts, and a landmark Rs 200 billion development package for Hazara Division. The budget also allocates Rs 52.9 billion for road infrastructure development, Rs 2 billion for the Ehsaas Kisan Programme, and Rs 2 billion to support overseas employment opportunities for provincial youth.

As part of a broader relief package, the Chief Minister announced a 7 percent increase in salaries and pensions for government employees, merger of the 2022 and 2025 Adhoc Relief Allowances into basic pay, a 50 percent increase in conveyance allowance, enhancement of the Special Conveyance Allowance from Rs 6,000 to Rs 10,000, and an increase in the minimum wage from Rs 40,000 to Rs 45,000 per month.

To stimulate economic activity and support the private sector, the Government has reduced the Infrastructure Development Cess from 2 percent to 0.75 percent, exempted residential and commercial properties up to five marlas from property tax, reduced hotel bed tax from 7 percent to 5 percent, abolished professional tax for low-income earners and employees in BPS-1 to BPS-6, and granted a 30 percent concession on industrial building tax arrears.

The Chief Minister reaffirmed the Government’s commitment to maintaining tax relief measures for the merged districts and ex-PATA regions and announced that no new taxes would be imposed in these areas during FY 2026-27.