The Government of Khyber Pakhtunkhwa is preparing to unveil a massive Rs2.15 trillion budget for the fiscal year 2026-27, featuring significant investments in education, healthcare, tourism, and environmental initiatives while promising the creation of more than 50,000 jobs across the province.
The budget reflects one of the most ambitious spending plans in the province’s history. However, it also comes at a time when financial pressures are increasing. According to budget documents, salary expenditures are expected to rise by 13 percent during the next fiscal year, while pension obligations are projected to increase by 17 percent, putting additional strain on public finances.
Education has emerged as one of the biggest winners in the upcoming budget. The provincial government has proposed allocating Rs363 billion for primary and secondary education, along with Rs45 billion for higher education. To boost school enrollment in settled districts, Rs500 million has been earmarked for enrollment campaigns, while Rs8.5 billion will be spent on providing free textbooks to students.
The health sector is also set to receive substantial funding. A total of Rs276.54 billion has been proposed for healthcare, with most of the allocation dedicated to ongoing projects and the remainder reserved for new initiatives aimed at improving medical services and expanding access to healthcare facilities.
A major focus of the budget is environmental sustainability and job creation. Provincial authorities plan to generate more than 50,000 employment opportunities through green projects and environmental programs. Additionally, 40 percent of carbon-related revenues are proposed to be distributed directly to local communities to support development and conservation efforts.
Tourism development is another key priority. More than Rs12 billion has been allocated for tourism-related projects, with the government aiming to improve facilities and services for up to five million tourists. Several initiatives are expected to be implemented with support from the World Bank to strengthen the province’s tourism infrastructure.
The province expects total revenues of Rs2.305 trillion in the next fiscal year, including Rs1.32 trillion from the federal divisible tax pool. Provincial tax collections are projected at Rs99 billion, non-tax revenues at Rs51 billion, and net hydel profits at Rs36 billion. The budget also proposes Rs426 billion for development spending and Rs321 billion for the merged districts, reflecting continued efforts to improve infrastructure and public services. While the spending plan promises major development gains, its long-term sustainability will depend on the province’s ability to meet its ambitious revenue targets.
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