Peshawar | ReNews Pakistan
The Khyber Pakhtunkhwa government has announced a Rs 2.17 trillion budget for the fiscal year 2026 27, placing a major emphasis on development projects, urban improvement, infrastructure expansion and regional uplift across the province.
Presenting the budget in the KP Assembly, Chief Minister Sohail Afridi said the provincial government has allocated Rs 524 billion for the Annual Development Programme, making development spending one of the central pillars of the new financial plan. The budget also sets aside Rs 35 billion for merged tribal districts, reflecting the government’s focus on infrastructure and public service delivery in previously underdeveloped areas.
A major urban development component of the budget is the Rs 36 billion allocation for the Peshawar Rehabilitation Programme. The initiative is expected to support improvement of civic infrastructure, public spaces, roads and urban services in the provincial capital.
The government has also earmarked Rs 7.5 billion for the Peshawar Bus Rapid Transit project, indicating continued financial support for mass transit and urban mobility. In addition, Rs 4 billion has been allocated for the Khushhal Hazara Programme, aimed at regional development in Hazara division.
The budget proposes Rs 42 billion for the energy sector, a key area linked with industrial growth, real estate development and long-term investment activity. The transport sector has been allocated Rs 14 billion, while local government has received Rs 90 billion, which may support municipal services, local infrastructure and development schemes at district level.
The agriculture department has been allocated Rs. 29 billion, while Rs 2 billion has been proposed for the Ehsaas Kisan Programme. These allocations are expected to support rural development and strengthen the economic base of agricultural areas.
The budget also includes Rs 2.5 billion for an electric bikes and rickshaws scheme, aimed at promoting cleaner and more affordable transport options in urban and semi-urban areas.
The proposed budget will now be debated in the KP Assembly before being put to a vote for approval.

Peshawar | ReNews Pakistan
The Federal Budget 2026-27 has generated cautious optimism among property dealers, contractors, builders and construction sector stakeholders across Khyber Pakhtunkhwa, as proposed tax relief measures are expected to revive real estate activity and encourage fresh investment in the sector.
Among the key budget proposals welcomed by the property and construction community is the reduction in withholding tax on property transactions for tax filers.
According to the proposals, withholding tax on property purchases would be reduced from 2.5 percent to 1.5 percent, while tax on property sales would be cut from 5.5 percent to 2.75 percent.
Builders and contractors in the province believe these measures could help restore confidence in the property market, which has faced pressure in recent years due to higher taxation, inflation, reduced purchasing power and slow investment activity.
In Nowshera, contractors Wisal Khan and Irshad Khan welcomed the proposed reduction in property-related taxes, saying the move would make property transactions more affordable for buyers and sellers.
“These reductions will make property transactions easier and encourage investment in the real estate sector,” said Wisal Khan, chief executive of a private construction firm.
He said that when the property market gains momentum, its benefits are not limited to builders and developers alone. The construction sector is directly linked with several allied industries, including cement, steel, pipes, sanitary fittings, electrical goods, furniture, paint, glass, tiles and transport.
“When construction activity increases, dozens of industries benefit, and employment opportunities are created for skilled and unskilled workers,” he added.
Stakeholders said the proposed tax relief could help bring back investors who had remained cautious due to higher transaction costs and uncertainty in the market. They believe that lower taxes may increase the number of documented property transactions and support formal economic activity.
Real estate experts said that the property sector has long played an important role in Pakistan’s economy by generating investment, supporting urban development and creating employment.
In Khyber Pakhtunkhwa, construction activity is also considered important for local markets, especially in Peshawar, Nowshera, Mardan, Swat, Abbottabad, Dera Ismail Khan and other growing urban centres.
Contractors said that any revival in real estate activity would also provide relief to daily wage labourers, masons, electricians, plumbers, carpenters, painters and transport workers who depend heavily on construction projects for income.
Business leaders, however, expressed a more cautious view. While appreciating some relief measures, representatives of the Sarhad Chamber of Commerce and Industry said the budget should include stronger steps to promote investment, industrial growth and private sector confidence.
SCCI President Junaid Altaf welcomed the government’s decision to abolish the Super Tax and privatize loss-making state enterprises but said that ambitious revenue and growth targets would require practical policies and consistent implementation.
Former SCCI President Zahidullah Shinwari also said that unemployment and industrial slowdown require focused attention, adding that investment-friendly policies are necessary to support long-term economic growth.
Despite these reservations, the overall reaction from property and construction stakeholders remained positive. Many believe that the proposed reduction in property taxes could mark an important step toward reviving market activity, encouraging investment and supporting job creation.
As the budget proposals move toward implementation, real estate and construction sector representatives said the real test would be whether the announced relief is applied effectively and whether it succeeds in bringing genuine momentum back to the property market.
For now, the Federal Budget 2026-27 has offered renewed hope to builders, contractors, investors and allied industries across Khyber Pakhtunkhwa, with expectations that lower property taxes may help revive construction activity and support broader economic stability.

Peshawar | ReNews Pakistan
The Khyber Pakhtunkhwa government has announced its financing plan for the proposed Peshawar to Dera Ismail Khan Motorway, a 360 kilometre infrastructure project aimed at strengthening transport connectivity between the northern and southern regions of the province.
According to KP Finance Adviser Muzzammil Aslam, the provincial government intends to finance the project through its own budgetary resources, supported by fiscal discipline, better financial planning and improved resource management.
He said the government has completed initial groundwork for the motorway and is preparing to allocate funds in different phases. The estimated initial funding requirement for the project is between Rs 200 billion and Rs 250 billion.
The finance adviser said the financing strategy is based on internal resource mobilisation, with the provincial government seeking to reduce dependence on external borrowing for major development projects. He added that improved financial management would allow the province to move ahead with large scale infrastructure schemes in a more structured manner.
The Peshawar to Dera Ismail Khan Motorway is being planned as one of the key road connectivity projects in Khyber Pakhtunkhwa. Officials believe the motorway will improve travel between major districts, support trade movement and provide better access to remote and developing areas of the province.
The project is also expected to play an important role in linking southern districts with the provincial capital and other economic centres. Improved road infrastructure could help reduce travel time, facilitate passenger movement and support commercial activity across the region.
Officials said the motorway is expected to be developed in multiple phases, with construction and funding to be carried out under a structured development framework.
The government plans to use provincial resources for different portions of the project while maintaining control over expenditure and implementation priorities.
The KP government has also indicated that more large scale infrastructure projects may be launched in the coming months as part of its wider development agenda.
Officials said the focus would remain on projects that improve connectivity, strengthen local economies and support balanced regional development across the province.
The proposed motorway is being seen as a major step in the province’s long term infrastructure planning, particularly for improving links between Peshawar, southern KP and adjoining regions.