K-P to unveil Rs2tr tax-free budget

Surplus planned as spending to focus on development, education emergency

PESHAWAR:

The Khyber-Pakhtunkhwa government is set to present a Rs2,000 billion budget tomorrow, with over Rs1,800 billion allocated for current expenditures. The budget will show a surplus of Rs180 billion and will not introduce any new taxes. However, the scope and rate of existing taxes will be expanded.

A total of Rs433 billion has been earmarked for development projects, including funds for the development of the newly merged tribal districts. The government will also announce the imposition of an "education emergency" in the new fiscal year. Under this initiative, furniture will be provided to 100 per cent of public schools.

To boost its own revenues, the province has set a 40 per cent higher target for provincial tax collection compared to the current fiscal year. The new budget includes the establishment of four additional cardiac centers in addition to the existing ones, as well as special funds for the merged districts.

Measures to support the province's vulnerable, marginalized, and low-income populations are also part of the budget. Funding has been allocated for key infrastructure and welfare projects including the Peshawar-DI Khan Motorway, a new electricity transmission line, the establishment of an insurance company, and the Chashma Right Bank Canal.

Safe City projects in Peshawar, Bannu, and DI Khan will receive financial support, and the education budget is being increased by 13 per cent. The monthly honorarium for artists will also be raised from Rs100,000 to Rs150,000.

A significant portion of the development budget will focus on completing ongoing projects. Priority will be given to projects that are 80 per cent or more complete, followed by those with 60 per cent completion. The number of new development projects has been capped at 500, with Rs195 billion to be immediately released, and up to Rs250 billion allocated as needed.

For the first time, a special committee will be formed to approve projects based on priority and necessity. The budget will continue to prioritize the education, health, and social welfare sectors. Additionally, the 13-year throw-forward period for the Annual Development Program (ADP) will be reduced to seven years. A safari park is also planned for Misri Banda in Nowshera as part of the new fiscal year's initiatives.

The federal government is set to allocate a total of Rs1,342.78 billion to K-P from the divisible pool for the upcoming fiscal year 2025-26, which will raise the province's overall budget to approximately Rs2,000 billion.

For the ongoing fiscal year 2024-25, the federal government was expected to provide Rs1,221.53 billion. However, according to revised estimates, the actual amount transferred to the province stood at Rs1,135.66 billion by the end of the fiscal year.

In the upcoming fiscal year, the merged tribal districts will receive a Rs40 billion subsidy in the energy sector. This is a reduction from Rs65 billion allocated during the current fiscal year. Additionally, the federal government will provide Rs80 billion in special grants to these merged districts — an increase from Rs66 billion allocated in the current year.

Under the Public Sector Development Programme (PSDP), the merged tribal areas will be allocated Rs65.44 billion, compared to Rs70 billion in the current fiscal year.