Khyber Pakhtunkhwa Announces Surplus Budget for FY2025-26

The Khyber Pakhtunkhwa government presented a substantial Rs 2119 billion surplus budget for the fiscal year 2025-26 on Friday. The budget includes a 10% increase in the salaries of government employees and a 7% raise in the pensions for retired personnel. No new taxes were introduced.

The budget was formally revealed by Provincial Minister for Finance, Aftab Alam Afridi, in the presence of Chief Minister Ali Amin Khan Gandapur.

The current expenditure for settled districts is estimated at Rs. 1255 billion, with an additional Rs. 160 billion allocated for the merged districts of the former Fata.

Federal Receipts and Provincial Resources

The finance minister detailed that the province anticipates receiving an estimated Rs. 1147.761 billion in federal receipts. This includes Rs. 137.912 billion from 1% of the divisible pool related to the war against terrorism, Rs. 57.115 billion as straight transfer in royalty and surcharge on oil and gas, Rs. 58.151 billion from the windfall levy on oil, Rs. 34.580 billion as net hydel profit, and Rs. 71.410 billion in arrears of net profit.

According to the minister, provincial resources have grown by 38% due to the expansion of the tax base without implementing any new levies. Tax receipts are projected to reach Rs. 83.5 billion, with non-tax receipts contributing Rs. 45.5 billion. Additionally, the province expects to generate Rs. 0.25 billion in capital receipts and Rs. 10 billion through other means.

Additional Funding and Expenditures

The house was informed about receipts from the federal government, including Rs. 63 billion for the merged districts’ current budget grant, Rs. 39.600 billion for the annual development program, Rs. 50 billion for the Accelerated Implementation Programme (AIP), Rs. 42.740 billion as a 3% share from other provinces, and Rs. 17 billion for the temporarily displaced persons (TDPs).

Further receipts include Rs 3.293 billion from PSDP, Rs 1506.92 billion from federal receipts, Rs 129 billion from provincial receipts, Rs 10.25 billion from other receipts, Rs 291.340 million from merged districts receipts and Rs 177.188 million from federal projects assistance.

The government has allocated Rs 1255 billion for current expenditures in settled areas, including Rs 288.514 billion for provincial salaries and Rs 288.609 billion for tehsil salaries. A developmental expenditure of Rs 547 billion has been earmarked, including Rs 195 billion for PADP, Rs 39 billion for district ADP, and Rs 39.6 billion for merged tribal districts’ ADP.