PESHAWAR – Khyber Pakhtunkhwa (KP) is set to present a Rs2 trillion budget for the fiscal year 2025–26, featuring a Rs200 billion surplus. According to Finance Department sources, the development budget is expected to exceed Rs433 billion, reflecting a 40% increase compared to the previous year. Around 500 new development schemes will also be introduced.
The provincial expenditure for the upcoming year is estimated at Rs1,800 billion. Major allocations will go toward education and the Sehat Card program, signaling a strong focus on public welfare. While there is no salary increase proposed in the new budget, a reduction in income tax on salaries is under consideration.
Advisor to Chief Minister on Finance, Muzzammil Aslam, noted 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 solarization projects and emergency funds for education and health. A 10% increase in tobacco cess has been recommended as well.
To assist older industrial units, an amnesty scheme is being considered to settle dues pending since before 2020. The budget may also include incentives for improving public infrastructure and basic services in underserved areas.
Despite these ambitious plans, KP remains financially dependent on the federal government for 93% of its resources. The province generates only 6% of its budget through local revenue, highlighting the ongoing challenge of financial self-reliance.