KP Chief Minister Afridi Declares No Provincial Funding for Centre Without Imran Khan’s Approval

PESHAWAR: Khyber Pakhtunkhwa Chief Minister Muhammad Sohail Afridi announced on Friday that the province will not allocate any additional grant to the federal government while presenting a Rs 2.17‑trillion budget for FY 2026‑27, which projects a deficit of Rs 48 billion.

Speaking in the KP Assembly’s budget session, presided over by Speaker Babar Saleem Swati, Afridi said any decision on extra funding for the centre must be approved by PTI founder Imran Khan.

“During the National Economic Council meeting we made it clear that the authority to authorize any further transfer to the federal government rests with Imran Khan, the final decision‑maker,” the chief minister told lawmakers.

He added that, unlike other parties whose leaders were granted meetings, the KP government has been denied a meeting with its own leader. Afridi alleged that Imran Khan is being kept in isolation, with visits from his wife, Bushra Bibi, family members and lawyers prohibited.

The PTI leadership has demanded the restoration of family and legal visits, access to party officials, and a weekly telephone call with his sons. “We will not sign any draft until we meet Mr Khan,” Afridi warned.

Regarding the National Finance Commission award, Afridi noted that the prime minister hinted at finalising the process within six months. If the award is not announced within that timeframe, the share for the merged districts will be incorporated into KP’s entitlement under the seventh NFC award. He also said the eleventh NFC remains stalled, aggravating grievances in the merged areas.

On the projected deficit, the chief minister stressed that KP will cover the Rs 48 billion shortfall through its own savings, avoiding any borrowing.

Revenue Projections

The budget estimates total provincial revenue at Rs 2.12 trillion against expenditures of Rs 2.17 trillion.

Federal transfers constitute Rs 1.5 trillion, including Rs 1.24 trillion in tax‑assignment transfers, Rs 149 billion from the war‑on‑terror divisible pool, Rs 53.5 billion in straight transfers, Rs 24.6 billion from the oil windfall levy, Rs 38.2 billion in net hydro‑electric profit (NHP) for the coming fiscal year, and Rs 78.4 billion in NHP arrears.

Own‑tax and non‑tax receipts are projected at Rs 182.4 billion—a 41.3 % rise over the current year’s target of Rs 129 billion. Of this, tax revenue is expected to be Rs 115.9 billion and non‑tax revenue Rs 66.4 billion.

Grants for the merged areas are set at Rs 199 billion, comprising Rs 95 billion in current‑budget grants, Rs 29 billion for the Annual Development Programme (ADP), Rs 52.2 billion for the Accelerated Implementation Programme (AIP), Rs 17 billion for temporarily displaced persons, and Rs 5.8 billion for district‑level ADP.

Afridi said the federal government reduced its promised AIP allocation from Rs 100 billion to just Rs 27 billion. Foreign‑assisted projects are projected at Rs 150 billion, while federal development and non‑development grants under the Public Sector Development Programme total Rs 5.1 billion.

Expenditure Outline

Out of the Rs 2.17 trillion outlay, Rs 1.64 trillion is earmarked for current expenditure and Rs 524.2 billion for the ADP.

Current spending for settled areas is projected at Rs 1.46 trillion, covering provincial salaries (Rs 334.3 billion), tehsil salaries (Rs 305 billion), pensions (Rs 201.4 billion), non‑salary items (Rs 457 billion), tehsil non‑salary items (Rs 43.4 billion), capital expenditure (Rs 45.3 billion), miscellaneous costs (Rs 22 billion) and a Rs 57 billion debt‑management fund.

Current spending for merged areas is set at Rs 180 billion, including provincial salaries (Rs 65.4 billion), tehsil salaries (Rs 49 billion), pensions (Rs 5.5 billion), provincial non‑salary expenses (Rs 29.9 billion), tehsil non‑salary expenses (Rs 13 billion) and Rs 17 billion for temporarily displaced persons.

The ADP allocation of Rs 524 billion is broken down into a provincial component of Rs 235 billion, district ADP (Rs 47 billion), merged‑area ADP (Rs 29 billion), AIP (Rs 52.2 billion), donor‑funded projects (Rs 150 billion) and federal PSDP funding (Rs 5.1 billion).

Relief Measures

The budget introduces a 7 % increase in salaries and pensions and merges the ad‑hoc relief allowances of 2022 and 2025 into basic pay. Conveyance allowance rises by 50 %, and the special conveyance allowance increases from Rs 6,000 to Rs 10,000. The minimum wage is lifted to Rs 45,000 from Rs 40,000.

No new taxes are being introduced. The infrastructure development cess has been lowered to 0.75 % from 2 %, a 62 % reduction intended to ease the business environment and attract investment.

Properties up to five marlas—approximately 200,000 households—receive a property‑tax exemption. The government also reaffirms its tax‑relief policy for the merged districts and Malakand division, with no new taxes slated for these areas in the upcoming fiscal year.

Published in Dawn, June 20 2026

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