PESHAWAR: Adviser to the Khyber Pakhtunkhwa Government on Finance, Muzammil Aslam, stated that the provincial government has set realistic fiscal and development priorities in the 2025–26 budget based on ground realities and clarified, no new loans have been taken in the new budget.
Addressing a post-budget press conference, Muzammil Aslam emphasized that if the federal government improves its performance, provinces could deliver services more effectively. Unfortunately, due to poor tax collection by the federal government, Khyber Pakhtunkhwa suffered a shortfall of Rs. 90 billion last years.
He revealed that development funds allocated to KP by the federal government were less than those for Sindh and Punjab, and the province did not receive its full share under the NFC Award and Annual Development Program (ADP).
He added that the province is close to achieving its Rs. 93 billion revenue target for the fiscal year 2024–25. Additionally, the provincial government spent Rs. 20 billion on development projects and Rs. 47 billion on current expenditures in the merged tribal districts (AIP) from its own resources.
The ADP size has been increased to Rs. 153 billion, and so far, projects worth Rs. 419 billion have been completed. The new budget includes 810 new development projects with an estimated cost exceeding Rs. 500 billion.
Muzammil Aslam stressed again that no new loans will be taken in the upcoming fiscal year. However, he noted that borrowing could be considered for large-scale mega projects. The province has allocated Rs. 150 billion for debt repayments, which is currently yielding a daily return of Rs. 60 million, and is expected to generate Rs. 17–18 billion annually.
For the first time, the federal government is expected to fully pay KP its Rs. 70 billion share from hydropower revenues in the next fiscal year, while currently, Rs. 3 billion is being paid monthly.
Speaking about government employees, Aslam said that KP employees are receiving about 30 different types of allowances, including a 30% disparity allowance for non-secretariat staff. Salaries for police personnel have also been brought in line with Punjab Police, along with an additional 10% increase.
In conclusion, he reaffirmed that the KP government remains committed to financial discipline, development of underprivileged regions, and public welfare as its top priorities.
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