KP CM unveils Rs2.17 trillion budget for FY2026-27, with deficit of Rs48bn

Khyber Pakhtunkhwa Chief Minister Sohail Afridi presented the provincial budget for the fiscal year 2026-27 in the KP Assembly on Friday with total outlay of Rs2.17 trillion, with an estimated fiscal deficit of Rs48 billion, reported 24NewsHD TV Channel.

At the outset of his budget speech, he said all parliamentarians of the PTI from the provincial assembly had unanimously decided to present the budget. Earlier, the presentation of the budget remained doubtful as the provincial government reportedly linked it to a meeting with incarcerated PTI founder Imran Khan.

In his speech, CM Afridi also announced that the budget he was presenting had a deficit of Rs48bn. “The KP government will not seek a loan of Rs48bn from anyone,” he said, adding that “we will provide this amount to the people of KP from our own resources”.

Moreover, he said the budget would be in accordance with the Federal Board of Revenue’s tax collection target of Rs15.2 trillion. “There will be no grants for the Centre in this budget,” he asserted. He earlier presided over a meeting of the provincial cabinet, which approved the budget.

CM Afridi said that the flagship “Sehat Card” health insurance programme has been allocated Rs50 billion, while Medical Teaching Institution (MTI) hospitals will receive Rs80 billion.

Furthermore, Afridi said Rs14 billion had been earmarked for free medicines in public sector hospitals, while an additional Rs4 billion had been allocated for the construction of a new general hospital in the province.

On social protection, he said the “Ehsaas Mustahiq” welfare programme would receive Rs150 billion, alongside Rs28 billion for Zakat distribution. He added that Rs1.1 billion had been set aside for the “Zamung Kor” complex for street children, Rs100 million for transgender welfare and Rs51 million for religious minorities.

He said the province’s Annual Development Programme (ADP) comprised 2,765 projects, including 1,564 ongoing and 1,201 new schemes, with an estimated long-term cost of Rs2.448 trillion. The development portfolio includes 2,070 projects in settled districts, 318 in merged tribal districts and 377 under an accelerated development framework.

For immediate development spending, Afridi said Rs52 billion had been allocated for road improvements, Rs36 billion under the Peshawar Rehabilitation Programme, Rs34.24 billion for urban development and Rs20.07 billion for multi-sector initiatives. He added that Rs20.17 billion had been set aside for the Home Department’s capital needs, Rs16.33 billion for health sector expansion, Rs10.31 billion for clean water projects, Rs7.25 billion for education and Rs6.63 billion for sports and tourism.

To improve urban mobility and promote clean energy, the budget includes Rs7.5 billion in subsidies for the Peshawar Bus Rapid Transit (BRT) system and Rs2.5 billion to support electric bikes and rickshaws. CM Afridi also announced a Rs1.5 billion youth internship programme and Rs200 million for the “Ehsaas Nojawan” scheme in merged districts.

In the education sector, he said Rs10 billion would be spent on upgrading primary and secondary schools, along with Rs362 million for the construction of 14 new colleges.

KP Chief Minister announced that the regional development allocations include Rs44 billion under the “Khushal Hazara” programme, Rs150 million for sports stadiums across eight Hazara divisions and Rs800 million for tourism development in the merged tribal districts.

Khyber-Pakhtunkhwa Chief Minister Sohail Afridi on Friday described the province's budget for fiscal year 2026-27 as prosperous and revolutionary after the provincial cabinet approved the Rs2.12 trillion budget, which includes a proposed 7 per cent increase in salaries and pensions and a rise in the minimum monthly wage to Rs45,000.

The budget was approved during a cabinet meeting chaired by Afridi. According to official documents, Rs524 billion has been allocated for the Annual Development Programme (ADP), while current expenditure is projected at Rs1.645 trillion. The budget deficit for the upcoming fiscal year is estimated at Rs48 billion. The province expects to receive Rs1.584 trillion from the federal government, including more than Rs1.24 trillion in federal tax revenues.

Additional projected receipts include Rs149 billion under the war on terror allocation, over Rs53 billion from the oil and gas surcharge, more than Rs24 billion from the windfall levy on oil, and over Rs38 billion in net hydel profit.

The provincial government has estimated its own-source revenues at more than Rs182 billion.

Of the current expenditure, the salary bill is estimated at Rs753 billion, while pension payments are projected at Rs207 billion. A further Rs684 billion has been earmarked for non-salary expenditure. According to the Budget Strategy Paper for fiscal year 2026-27, the province's gross provincial product reached Rs11.885 trillion, while per capita income increased to Rs290,000. The government reported continued fiscal stability and said it had achieved its surplus target of Rs157 billion during the outgoing fiscal year.

The budget paper stated that agriculture contributes 30 per cent to provincial growth, while the services sector recorded growth of 3 per cent. Education and labour-related sectors expanded by 14 per cent and 19 per cent, respectively.

The government also highlighted a Rs12.1 billion food security programme and reported spending Rs41 billion on the Sehat Card programme, which provided healthcare services to 32 million people. Literacy in the province stands at 56.7 per cent, according to official figures.

Officials from the Finance Department said Rs225 billion has been proposed for the provincial Annual Development Programme (ADP), while an additional Rs150 billion is expected to come through foreign assistance and aid-funded projects. The road sector is likely to receive the largest allocation, with Rs60 billion proposed for development schemes. More than 2,500 development projects are expected to be included in the upcoming budget.

The province is also expected to receive Rs1.379 trillion from the federal government during the next fiscal year, similar to the current year. In addition, Khyber Pakhtunkhwa is expected to receive Rs139 billion under the one per cent share allocated to provinces affected by terrorism.

The provincial government has proposed allocating Rs50 billion for the Health Card programme in FY2026-27. 

Of the total amount, Rs43 billion is earmarked for settled districts, while Rs7 billion has been proposed for residents of the merged tribal districts. 

“We said Imran Khan sahib is the final authority on this,” he said, adding that the KP government’s representatives were not being allowed to meet Imran. He said his party had demanded a meeting with Imran ahead of the provincial budget, further reiterating the PTI’s allegation that Imran and his spouse, Bushra Bibi, were being kept in solitary confinement and isolation.

Amid protest by the opposition, he continued that a demand to allow Imran’s meetings with his family had also been made. “The restoration Imran’s fundamental rights was also demanded,” he added.

He went on to say that demands for Imran’s treatment in the presence of his personal physicians and allowing him telephone calls with his sons and access to television, books and newspapers were also demanded.

“We will not sign any draft until we are allowed to meet Imran,” he asserted.

Coming to the budget for FY2026-27, he said his government’s focus was now on moving from development to progress and prosperity. The vision under the FY27 budget, “Khushaal Pakistan”, was to ensure that the fruits of prosperity reached the people. Afridi said the KP government was to get Rs1.59tr in federal receipts in the coming fiscal year, and the target for provincial receipts was set at Rs182.4bn. Overall, the revenue target was set at Rs2.1tr.

Reporter: Malik Rehman