PESHAWAR: The Khyber Pakhtunkhwa government on Friday presented a Rs2.122 trillion tax-free provincial budget for the fiscal year 2026-27, prioritising social welfare, healthcare expansion, infrastructure development and digital governance reforms.

The budget was presented by Chief Minister Sohail Afridi in the provincial assembly amid protest from opposition members who chanted slogans and gathered near the speaker’s podium as proceedings began.

According to budget documents, the province will rely heavily on federal transfers, estimated at Rs1.584 trillion, while the overall plan has been described by the government as “pro-people” and development-focused.

Afridi announced a 7% increase in salaries and pensions for government employees and proposed raising the minimum wage to Rs45,000, alongside continued emphasis on social protection programmes.

He said education and health remain top priorities, with Rs468 billion allocated for education and Rs334 billion for health services. The flagship Sehat Card programme has been allocated Rs50 billion, while MTI hospitals will receive Rs80 billion and Rs14 billion has been earmarked for free medicines in public hospitals.

The budget also includes Rs150 billion for the Ehsaas Mustahiq welfare programme, Rs28 billion for Zakat distribution, and funds for vulnerable groups including children, women and minorities.

In development spending, Rs52 billion has been allocated for road improvement, Rs36 billion for the Peshawar Rehabilitation Programme, and Rs34.24 billion for urban development projects. A further Rs20 billion has been set aside for multi-sector initiatives.

Major allocations have also been announced for energy, agriculture, local government and law and order, with Rs191 billion for security-related spending and Rs42 billion for energy projects.

The budget outlines an extensive development portfolio of 2,765 projects, including ongoing and new schemes across settled and merged districts, alongside major investments in water supply, sanitation, irrigation and climate resilience projects.

On infrastructure, the province has earmarked Rs23.3 billion for road accessibility programmes, Rs18.1 billion for urban improvement, and Rs17.5 billion for rural road networks.

In addition, significant funds have been allocated for digital transformation, including artificial intelligence, e-governance, IT infrastructure and public Wi-Fi expansion, reflecting a push toward a “digital KP” agenda.

Environmental and climate-related initiatives have also received attention, with Rs12 billion allocated to disaster risk management and additional funding for renewable energy, afforestation and water conservation projects.

The government said the budget aims to reduce regional disparities, strengthen public services and support economic self-reliance, while maintaining its claim of being tax-free with no new levies introduced.