Adviser to the KP Chief Minister on Finance Muzzammil Aslam, accompanied by Minister for Information and Public Relations Shafee Jan, while addressing a post-budget press conference at the Civil Secretariat Peshawar, said that the federal government has been given a clear message that Khyber Pakhtunkhwa cannot provide funds to the federation without a meeting with PTI Founder Chairman Imran Khan.
He said the Federal Board of Revenue (FBR) has set a tax collection target of Rs15,268 billion, while the federal government intends to retain more than Rs13,350 billion. However, the federal government cannot unilaterally withhold provincial funds without a constitutional amendment. Under the Constitution, divisible pool revenues are first transferred to the provinces, which may then decide to provide funds to the federation.
Muzzammil Aslam said that the Khyber Pakhtunkhwa government has never agreed to provide funds to the federal government and questioned how Rana Sanaullah could make such a claim, adding that the matter was not included in the agenda of the National Economic Council (NEC).
He said that the federal budget serves as an umbrella, while provincial governments provide the clothing beneath it, protecting ordinary citizens from the adverse impacts of the federal budget. He further announced that the provincial government is preparing to file a case in the Constitutional Court against what it describes as injustice and discrimination against Khyber Pakhtunkhwa in the National Finance Commission (NFC) Award, and that legal counsel has already been appointed.
Muzzammil Aslam stated that the Government of Khyber Pakhtunkhwa has estimated total revenues of Rs2,122 billion for FY 2026-27, representing an increase of 0.1 percent compared to Rs2,119 billion in FY 2025-26.
Federal transfers, including the provincial share in federal taxes, the one-percent share for the war against terrorism, straight transfers, windfall levy proceeds, and net hydel profits, are estimated at Rs1,584.9 billion, a five percent increase over Rs1,506.9 billion last year.
Revenue generated from provincial sources is projected at Rs182.4 billion, an increase of 41 percent from Rs129.0 billion last year. Provincial tax revenues are estimated at Rs115.9 billion, up 39 percent from Rs83.5 billion, while non-tax revenues are projected at Rs66.5 billion, a 46 percent increase from Rs45.5 billion.
The Finance Adviser said grants for the merged districts have been estimated at Rs199.1 billion, which is 32 percent lower than the Rs292.3 billion allocated previously.
Addressing the post-budget press conference, Muzzammil Aslam said that total expenditures for FY 2026-27 have been estimated at Rs2,170 billion, an 11 percent increase over the Rs1,962 billion budgeted for FY 2025-26.
Current expenditures have been estimated at Rs1,645.7 billion, which is 16 percent higher than Rs1,415.0 billion last year. The current budget for settled districts stands at Rs1,465.7 billion, a 17 percent increase over Rs1,255.0 billion, while the current budget for merged districts is Rs180.0 billion, up 13 percent from Rs160.0 billion.
The total development budget has been set at Rs524.3 billion, which is four percent lower than the previous allocation of Rs547.0 billion. The Annual Development Programme (ADP) for settled districts has been increased to Rs235.0 billion from Rs195.0 billion, reflecting a 21 percent rise.
He said the ADP for merged districts has been set at Rs34.8 billion, compared to Rs40.0 billion last year, a decrease of 13 percent.
Muzzammil Aslam said the Khyber Pakhtunkhwa government has allocated Rs50.8 billion for the Sehat Card programme, including the merged districts, and has spent Rs125 billion on the programme over the last three years.
He added that the budget for Medical Teaching Institutions (MTIs) has been increased from Rs65.6 billion to Rs80 billion for FY 2026-27. An allocation of Rs14.35 billion has been made for the outsourcing of hospitals, including 72 new hospitals.Muzzammil Aslam said that the budget for public universities has been increased from PKR 10 billion to PKR 11.8 billion. An allocation of PKR 5 billion has been made for schools for out-of-school children, PKR 19.3 billion for good governance initiatives, and PKR 17 billion for temporarily displaced persons (TDPs).
Muzzammil Aslam further said that several new initiatives have been included in the FY 2026–27 budget. These include PKR 2 billion for the Ehsaas Kisan Program, PKR 12 billion for the Disaster Risk Management Fund, PKR 2 billion for interest payments under Ehsaas programs, PKR 2 billion for interest-free loans for university students, PKR 2 billion for interest-free loans for overseas workers, and PKR 2.5 billion for interest-free loans for e-bikes and e-rickshaws. Several other new programs have also been introduced, with a total allocation of PKR 36.1 billion for these new initiatives.ammil Aslam said that the budget for public universities has been increased from PKR 10 billion to PKR 11.8 billion. An allocation of PKR 5 billion has been made for schools for out-of-school children, PKR 19.3 billion for good governance initiatives, and PKR 17 billion for temporarily displaced persons (TDPs).
Muzzammil Aslam further said that several new initiatives have been included in the FY 2026–27 budget. These include PKR 2 billion for the Ehsaas Kisan Program, PKR 12 billion for the Disaster Risk Management Fund, PKR 2 billion for interest payments under Ehsaas programs, PKR 2 billion for interest-free loans for university students, PKR 2 billion for interest-free loans for overseas workers, and PKR 2.5 billion for interest-free loans for e-bikes and e-rickshaws. Several other new programs have also been introduced, with a total allocation of PKR 36.1 billion for these new initiatives.