BUDGET 2026-27: AJK Assembly passes Rs286bn budget for FY27

• Rs250bn earmarked for recurring expenditure, Rs36bn for development
• Rs26.28bn set aside for ongoing projects, Rs8.71bn for new schemes
• Federal pay, pension hike extended to AJK

MUZAFFARABAD: The Azad Jammu and Kashmir (AJK) Legislative Assembly on Monday passed a Rs286 billion budget for the fiscal year 2026-27 just hours after it was presented by Finance Minister Chaudhry Qasim Majeed.

Presided over by Speaker Chaudhry Latif Akbar, the assembly sitting witnessed around 50 per cent attendance, including about five lawmakers from the opposition PML-N and PTI. However, towards the end of the session, there was only one PML-N lawmaker in the House.

The budget comprises Rs250 billion for recurring expenditure and Rs36bn for development, including Rs1bn in foreign assistance.

Presenting the budget, Majeed said the government had framed its financial plan despite severe resource constraints, with public welfare, transparency and good governance remaining its guiding principles.

He said the Inland Revenue Department, which constituted the backbone of AJK’s own-source revenues, had achieved a substantial portion of its collection targets during the outgoing fiscal year. However, he acknowledged that the overall revenue target had once again remained unmet due to multiple factors.

He attributed the shortfall to the State Bank of Pakistan’s reduced policy rate, which lowered banks’ profit margins to between 9pc and 10pc — less than half the level of previous years — as well as a significant reduction in electricity tariffs that adversely affected receipts from education cess and taxes linked to the sale and purchase of immovable property.

Majeed said more than 110 branches of over 70 business entities had been integrated into the AJK Point-of-Sale (POS) invoicing system, which was expected to increase revenue from previously unregistered taxpayers by between 400 and 800pc.

The minister told the House that recurring expenditure would be financed through projected receipts of Rs250bn. Of this amount, Rs146bn would come from AJK’s share in federal taxes under the variable grant, Rs60bn from income tax, Rs15.2bn from other taxes, Rs25bn from internal receipts, Rs2bn from water-use charges and Rs1.8bn from capital receipts, including loans and advances.

The entire Rs36bn development budget, he said, would be financed through a federal development grant.

Among development allocations, the Communication and Works Department would receive the largest allocation of Rs14bn, followed by Rs4.1bn for health, Rs3.3bn each for education and energy and water resources, and Rs3.2bn for the Local Government and Rural Development.

Other allocations include Rs1.7bn for Physical Planning and Housing, Rs1.35bn for governance and miscellaneous sectors, Rs900 million for agriculture and livestock, Rs780m for research and development, Rs600m for forestry and watershed management, Rs550m for information technology and Rs470m for industries and minerals.

Majeed said 76pc of the Annual Development Programme, amounting to Rs26.28bn, had been earmarked for ongoing projects, while Rs8.71bn would finance new schemes.

He added that 93 development projects would be completed by the end of the current fiscal year, while another 170 projects were targeted for completion during 2026-27.

Among recurring expenditures, education would receive the highest allocation of Rs57.25bn, followed by Rs53.5bn for pensions, Rs32.61bn for wheat flour subsidy under the head of State Trading, Rs25bn for health, Rs13.36bn for energy and water resources, Rs13.2bn for the Home Department, Rs10.62bn for miscellaneous grants, Rs9.64bn for general administration, Rs7.07bn for communication and works, Rs4.35bn for law, justice and parliamentary affairs, including the judiciary, Rs3.45bn for relief and rehabilitation, Rs2.5bn for forests, wildlife and fisheries, Rs2.2bn for the Board of Revenue, Rs1.48bn for agriculture, Rs1.36bn for livestock and dairy development, and Rs1.2bn for social welfare and women’s development.

The minister also announced that the salary and pension increases approved by the federal government would be extended to AJK government employees and pensioners.

Majeed also presented the revised estimates for the outgoing fiscal year, reducing the size of the 2025-26 budget from Rs310.2bn to Rs262.165bn.

Published in Dawn, June 30th, 2026