PESHAWAR – Khyber Pakhtunkhwa government is set to unveil Rs2.15 trillion Budget for fiscal year 2026-27, with major investments in education, healthcare, tourism, and environmental projects while projecting thousands of new jobs across the region.
Despite ambitious spending plans, Pakistan’s northwestern province faces rising financial obligations as Salary expenditures are expected to increase by 13 percent in the next fiscal year, while pension liabilities could rise by 17 percent, adding further pressure on public finances.
According to budget documents, the provincial government plans to allocate Rs.276.54 billion to the health sector, with the bulk of the funding directed towards ongoing projects and the remainder reserved for new initiatives aimed at strengthening healthcare services.
Education remains one of the biggest beneficiaries of the upcoming budget. The government has proposed Rs. 363 billion for primary and secondary education and another Rs. 45 billion for higher education. In a bid to improve school enrollment in settled districts, Rs. 500 million has been earmarked for enrollment drives, while Rs. 8.5 billion will be spent on providing free textbooks to students.
The budget also places significant emphasis on green growth and employment generation. Provincial authorities aim to create more than 50,000 jobs through environmental initiatives and have proposed allocating 40 percent of carbon-related revenues directly to local communities.
Tourism, a key pillar of the province’s economy, is also set for a major boost. More than Rs. 12 billion has been proposed for tourism development projects, with the government targeting facilities and services for up to five million tourists through programmes supported by the World Bank.
Budget documents show that provincial spending reached Rs. 988 billion during the first nine months of the current fiscal year, including Rs. 431 billion spent on salaries alone. Meanwhile, the Annual Development Programme (ADP) has been revised downward to Rs. 444 billion.
For the upcoming fiscal year, the government expects to generate Rs. 150 billion through provincial revenues. Total provincial income is projected at Rs. 2.305 trillion, including Rs. 1.32 trillion expected from the federal divisible tax pool. Provincial tax collections are targeted at Rs. 99 billion, while non-tax revenues are estimated at Rs. 51 billion. The province also expects to receive Rs. 36 billion in net hydel profits.
The budget proposes Rs. 1.545 trillion in current expenditures for settled districts and Rs. 426 billion for development spending. Additionally, Rs. 321 billion has been earmarked for the merged districts as the government continues efforts to improve infrastructure and public services in the region.
With billions allocated to social sectors, job creation, and tourism development, the upcoming budget represents one of the most ambitious spending plans in the province’s history. However, questions remain over whether projected revenues will be sufficient to sustain rising expenditure commitments in the years ahead.
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