The Khyber Pakhtunkhwa (KP) government has presented a surplus budget of Rs. 2,119 billion for the fiscal year 2025–26 in the provincial assembly. The Annual Development Program (ADP) has been allocated Rs. 547 billion.
The KP Assembly session began under the chairmanship of Speaker Babar Saleem. The budget was presented by Minister for Law, Babar Saleem.
According to the budget documents, the total budget outlay is Rs. 2,119 billion, with total annual expenditures estimated at Rs. 1,962 billion. The budget maintains a surplus of Rs. 157 billion. An allocation of Rs. 547 billion has been proposed for the ADP.
Health sector Gets Record Rs 276 Billion
KP has allocated a record Rs. 276 billion to the health sector in the 2025–26 budget, marking a 19% increase from the previous year. The Sehat Card program’s budget for settled districts has risen from Rs. 28 billion to Rs. 35 billion, with an additional Rs. 6 billion allocated for merged districts. The program now covers free treatment for kidney, liver, and heart conditions, as well as bone marrow transplants and cochlear implants. A new life insurance benefit has also been introduced for beneficiaries.
Increases in Salaries and Pensions
The KP government has proposed a 10% increase in the salaries of government employees and a 7% increase in pensions. For employees not receiving executive allowance, a 15% to 20% increase in disparity allowance has been proposed.
Increase in Minimum Wage
In the new fiscal year’s budget, the minimum monthly wage across the province has been increased from Rs. 36,000 to Rs. 40,000.
Federal Dues
According to the budget documents, the province is facing a Rs. 267 billion shortfall under the NFC. The federal government owes Rs. 71 billion in net hydel profit and Rs. 58 billion under oil and gas revenue heads. The province is estimated to receive Rs. 177 billion in external development grants.
Allocations and Tax Adjustments
Rs. 1,415 billion have been allocated for salaries and other expenditures. For settled districts, Rs. 1,255 billion have been proposed under current expenditures, while Rs. 160 billion are allocated for tribal districts. Revenue for the new fiscal year is projected at Rs. 129 billion.
Transfer and stamp duty on residential and commercial property allotment has been reduced from 2% to 1%. Tax exemption has been proposed for residential and commercial properties measuring 4.9 marla. The hotel bed tax is proposed to be reduced from 10% to 7%. Professional tax on individuals with a monthly income of Rs. 36,000 has been proposed to be abolished. Exemptions have also been proposed on registration and token tax for electric vehicles.
