Peshawar, June 13, 2025: The Khyber Pakhtunkhwa (KP) government on Friday presented a Rs2,119 billion Budget for the fiscal year 2025-26, with a strong emphasis on development, debt reduction, and fiscal discipline.
Presenting the budget in the provincial assembly, Finance Minister Aftab Alam announced that the government had repaid Rs49 billion in outstanding loans during the outgoing fiscal year, including Rs18 billion in interest payments.
To provide relief amid inflation, the government approved a 10% increase in salaries of public sector employees and a 7% hike in pensions.
Highlighting financial challenges, the minister revealed that the federal government deducted Rs42 billion under the National Finance Commission (NFC) Award and failed to disburse Rs40 billion earmarked for the current expenditures of the merged districts. He added that due to a Rs1 trillion shortfall in federal tax collections, KP received Rs90 billion less than anticipated.
Despite these setbacks, the previous provincial administration posted a Rs100 billion fiscal surplus, he noted.
The Annual Development Programme (ADP) has been set at Rs517 billion, which includes over Rs177 billion in foreign assistance (grants and loans). The development portfolio features 1,349 ongoing schemes and 810 new projects.
Key allocations include:
- Rs53.64 billion (16% of ADP) for 583 road construction and rehabilitation schemes
- Rs27 billion for 182 projects in the health sector
- Over Rs13 billion for 96 primary and secondary education schemes
- Rs6.27 billion for 63 higher education projects
- Rs1.28 billion for 10 transport-related schemes
- Rs8.88 billion for 51 sports development projects
- Rs6.99 billion for 68 security-related projects under the Home Department
- Rs4.79 billion for 59 energy initiatives
- Rs7.25 billion for 46 agriculture-related schemes
- Rs45.6 billion for district development programs
The budget also allocates:
- Rs700 million for the minerals sector
- Rs700 million for industrial development
- Rs620 million for livestock projects
- Rs550 million each for local government and tourism initiatives
Aftab Alam emphasized that Rs35 billion would be dedicated to fast-tracking the completion of high-priority projects. Additionally, Rs7 billion has been allocated to support reforms aimed at improving governance and service delivery across key sectors.
The finance minister concluded that the FY2025-26 budget reflects the provincial government’s commitment to sustainable development, infrastructure expansion, social services, and responsible fiscal management, despite federal financial constraints.
