Peshawar, June 14, 2025 — Khyber Pakhtunkhwa Budget 2025-26: In a significant financial move, the Khyber Pakhtunkhwa (KP) government has officially presented the Khyber Pakhtunkhwa budget 2025-2026, with Chief Minister Ali Amin Gandapur overseeing a cabinet meeting just hours before the presentation. This year’s provincial budget, worth Rs2.119 trillion, reflects a robust strategy for fiscal growth, public welfare, and infrastructural development, while maintaining a tax-free structure.
Historic Development Outlay and Salary Reforms
The KP government unveiled a record-breaking Rs547 billion development outlay, highlighting its commitment to long-term sustainability and equitable growth. In a welcome relief for public sector employees, the government approved a 10% salary increase for current staff, along with a 7% pension raise for retirees. Meanwhile, the provincial government raised the minimum wage from Rs36,000 to Rs40,000; however, the federal government has remained silent on the matter.
Furthermore, in a landmark decision to ensure institutional parity, the government brought KP Police salaries in line with those of the Punjab Police. As a result, the province expects this move to boost morale and improve operational effectiveness in its counter-terrorism efforts.
Strong Sectoral Commitments and Strategic Investments
Education, healthcare, and energy remain at the heart of the Khyber Pakhtunkhwa budget 2025–2026. Fulfilling his earlier commitment, KP CM Ali Amin Gandapur has prioritized the education sector in the current budget. The government allocated Rs5.04 billion to education and increased the overall elementary and secondary education budget by 11% to Rs363 billion. In line with his pledge to address critical issues such as textbook shortages and high dropout rates, the government has also introduced an additional Rs5 billion under the “education emergency” initiative to enroll out-of-school children.
Read more KP CM Vows to Prioritize Education in Upcoming Budget
Meanwhile, the health sector received a 19% boost, raising its budget to Rs276 billion. The flagship health card program saw a 25% increase in allocation, from Rs28 billion to Rs35 billion. Additionally, the government allocated Rs5.60 billion to upgrade non-DHQ hospitals.
The budget also prioritizes renewable energy, with Rs5.60 billion set aside for the Gabral-Kalam Hydropower Project. The KP Rural Investment Program received Rs4.20 billion to foster rural economic activity and combat poverty.
External Partnerships and Fiscal Planning
To further stimulate growth, KP has committed Rs3.92 billion each to the FATA Infrastructure Program and the Rural Economic Transformation Project. It has also earmarked Rs3.08 billion for the Food Security Support Project, indicating a strong focus on long-term agricultural resilience.
On the revenue side, the province projects Rs1.506 trillion from federal receipts, Rs129 billion from its own tax and non-tax revenues, and Rs171.83 billion in foreign project loans. Notably, the province has yet to receive its 3% share from other provinces for merged areas.
Despite political tensions including a standoff with Governor Faisal Karim Kundi over the Khyber Pakhtunkhwa Budget 2025-26 session the KP government convened the assembly via requisition, making history in the province’s parliamentary record.
