Peshawar, June 19, 2026: Khyber Pakhtunkhwa Chief Minister Sohail Afridi on Friday presented the provincial budget for the fiscal year 2026-27, proposing a total outlay of Rs2.17 trillion with an estimated fiscal deficit of Rs48 billion.
Presenting the budget in the provincial assembly, Afridi said members of the Pakistan Tehreek-e-Insaf (PTI) parliamentary party had unanimously decided to proceed with the budget presentation despite political concerns surrounding access to incarcerated PTI founder Imran Khan.
At the outset of his speech, the chief minister announced that the provincial government would not seek any borrowing to bridge the projected fiscal deficit.
“The Khyber Pakhtunkhwa government will not take a loan of Rs48 billion from anyone. We will provide this amount from our own resources for the people of the province,” he said.
Afridi stated that the budget had been prepared in line with the Federal Board of Revenue’s (FBR) tax collection target of Rs15.2 trillion and reiterated the provincial government’s stance regarding proposed financial arrangements between the federation and provinces.
He said no grants for the federal government had been included in the budget, referring to discussions on freezing provincial shares from the federal divisible tax pool under the National Finance Commission (NFC) framework and returning additional receipts to the Centre.
The chief minister said the provincial government had maintained that any decision on the matter required consultation with PTI founder Imran Khan. He alleged that party representatives had been denied access to Khan despite repeated requests and reiterated demands for meetings with him before finalizing key financial decisions.
During his address, Afridi also repeated PTI’s concerns regarding Khan’s prison conditions and called for restoration of what he termed his fundamental rights, including access to family members, personal physicians, books, newspapers, television, and communication with his sons.
Revenue and expenditure targets
According to the budget documents, the provincial government expects to receive Rs1.59 trillion through federal transfers during the next fiscal year, while provincial revenue collection has been projected at Rs182.4 billion.
The overall revenue target has been set at Rs2.12 trillion, against total expenditures of Rs2.17 trillion, resulting in the projected deficit of Rs48 billion.
A detailed breakdown shows that Rs1.64 trillion has been allocated for current expenditures, while Rs524.2 billion has been earmarked for the Annual Development Programme (ADP).
The government has projected Rs199 billion in federal grants for the merged districts and estimated Rs150 billion in foreign assistance for development projects.
In addition, federal development and non-development grants under the Public Sector Development Programme (PSDP) are expected to amount to Rs5.1 billion.
Salaries, pensions and tax measures
The budget proposes a 7 percent increase in salaries and pensions for government employees and retirees.
According to budget documents, the provincial government has not introduced any new taxes for the upcoming fiscal year. However, it has proposed reducing the Infrastructure Development Cess from 2 percent to 0.75 percent in an effort to support economic activity and investment.
Vision of ‘Khushaal Pakistan’
Outlining the government’s policy direction, Afridi said the focus of the new budget is to move beyond development spending toward broader economic progress and prosperity.
He said the FY2026-27 budget is based on the vision of “Khushaal Pakistan”, aimed at ensuring that the benefits of economic growth and development reach ordinary citizens across the province.
The budget now awaits detailed debate in the provincial assembly before its final approval.
