KP cabinet approves fiscal responsibility and debt management amendment bill 2026
PESHAWAR (APP): The 51st meeting of the Provincial Cabinet was held under the chairmanship of the Chief Minister of Khyber Pakhtunkhwa, Muhammad Sohail Afridi and several important decisions were taken.
Special Assistant to the Chief Minister for Information, Shafi Jan, briefed the media on the key decisions taken in the meeting.
The cabinet approved the Khyber Pakhtunkhwa Fiscal Responsibility and Debt Management (Amendment) Bill 2026. The objective of this bill is to strengthen fiscal discipline, improve borrowing limits and procedures, and make the monitoring system for public debt more effective.
These amendments will promote careful and planned borrowing for development projects while reducing reliance on unnecessary loans through improved financial management. For this purpose, a separate Debt Management Office will also be established.
According to Shafi Jan, under the amended law, the government will be bound to ensure that investment in non-financial assets each fiscal year is at least 20% of the province’s average income. If this ratio falls below that level, prior approval will be required.
Similarly, the limit for debt servicing has been set at up to 5% of the province’s average income, which can be increased to a maximum of 7% with special approval. Total public debt and guarantees will not exceed 75% of average income, although in special circumstances this limit may be extended to 100% with government approval.
The cabinet also approved the Budget Strategy Paper 2026–27, which outlines the government’s fiscal priorities and development strategy for the upcoming financial year. It focuses on increasing tax and non-tax revenue, reducing dependence on loans, improving returns on public investment, empowering youth, and emphasizing environmental protection.
The plan includes reforms in health, education, law and order, and clean energy sectors, along with initiatives such as solarization of government buildings, telemedicine in remote areas, a school monitoring system, digital skills programs for youth, and the Safe City project.
Shafi Jan said that the cabinet also approved amendments to the Khyber Pakhtunkhwa Jail Rules 2018, under which prisoners will be allowed virtual meetings and conversations with veiled women, elderly, and sick relatives to improve family connections on humanitarian grounds.
He added that the cabinet approved a performance framework under the Good Governance Roadmap aimed at improving the performance of government officers and rewarding high performers. Under this framework, outstanding officers can receive rewards of up to four basic salaries, and appreciation certificates will become part of their service records. The government has allocated 20 million rupees to achieve 25 targets during the fiscal year 2026–27.
The Special Assistant further said that the cabinet approved relaxation in the process of mutation, transfer, and lease of land for the construction of civil dispensaries in super high-risk union councils related to polio in Peshawar.
Additionally, the Khyber Pakhtunkhwa Journalist Welfare Endowment Fund (Amendment) Bill 2026 was approved to make the financial support system for journalists more effective and sustainable.
The cabinet also approved new salary scales for nine teachers in special education institutions and sanctioned funds to pay outstanding salaries under a project of the Population Welfare Department.
Shafi Jan said that three bills regarding the salaries, benefits, and privileges of assembly members, the Speaker, and the Deputy Speaker were also presented for consideration. It was clarified in the meeting that media reports about lifetime privileges for the Speaker and Deputy Speaker are incorrect, as no such provision exists in the proposed bill. Similarly, the impression that the Speaker would be provided with a Grade-17 private secretary, cook, or other staff after retirement was also declared false.
The meeting was informed that under Article 53(8) of the Constitution, the Speaker remains in office only until a new Speaker assumes charge, and the privileges are limited to that period only.
