KP budget contains no allocation for revival of industrial units: PBF

PESHAWAR: Chairman of Pakistan Business Forum (KP Chapter), Ashfaq Paracha, has said that the KP government has unveiled an ambitious Rs2,119 billion budget for 2026–27, which remains heavily dependent on federal support amounting to Rs1,506.9 billion. Out of the total outlay, Rs960 billion has been allocated for salaries and pensions.

Talking to the media here on Monday, he said that the budget contained no allocation for the revival of the sick industrial units in Khyber Pakhtunkhwa, nor did it provide any meaningful support for the province’s existing industries. It appeared that the KP government had left the industrial sector to fend for itself, with little indication even in the budget speech of any serious policy direction for industrial growth and sustainability.

A large number of factory owners burdened with bank liabilities avoided formally declaring closures, fearing legal complications and the loss of any future opportunity to restart operations. Many industrialists remained silent, holding on to the hope that improved conditions might one day allow them to reopen their businesses.

The consequences of this neglect were severe. If the present trend continued, the province could face an annual loss of nearly $500 million in industrial output, further weakening economic activity, employment generation, and investor confidence in Khyber Pakhtunkhwa, he added.

Similarly, he said that the agriculture sector had received merely a partial relief package in the form of a subsidy on DAP fertilizer, which was only partly welcome. Given the importance of agriculture in the provincial economy, the sector required a broader and more comprehensive support framework.

Paracha called for the replacement of the Provincial Advisor to the Chief Minister “with a competent individual who possesses a comprehensive understanding of the province’s economic realities, business climate, and development priorities”.

He emphasized that effective economic management required leadership that remained closely connected to the concerns of businesses, investors, and industrial stakeholders. Paracha questioned whether, in a House of 90 MPAs, there was not a single capable individual who could effectively lead the province’s finance ministry and address the economic challenges facing Khyber Pakhtunkhwa.

The PBF provincial chief lamented that the province’s business community had become a casualty of the prevailing political environment.

He also criticized the provincial authorities for their lack of engagement with key stakeholders, stating that the business community was not being adequately consulted on important economic and fiscal matters. He stressed that meaningful dialogue with the private sector was essential for formulating policies that could promote investment, industrial growth, and economic stability in the province.

Peshawar PBF President Arif Yousaf stressed that providing economic direction to the province was the responsibility of the provincial government. Despite federal levies, the provincial government had imposed professional tax, property tax, and Infrastructure Development Cess, further squeezing businesses, he said. “This multi-layered taxation has accelerated factory closures,” Peshawar PBF President said.

Arif Yousaf questioned the rationale behind provincial property taxes, particularly when industrial land was leased from the government. He also criticized the fragmented tax collection system, where the Excise Department, municipal authorities, and the KP Revenue Authority (KPRA) all demanded separate payments, creating an unsustainable burden.

He also lamented the deteriorating condition of Peshawar, noting with concern that even the provincial capital had been deprived of the attention and development it deserved. He questioned what message such neglect sent to the rest of the country when the capital of Khyber Pakhtunkhwa itself reflected poor planning and inadequate civic focus.

“If KP is left behind in terms of development and economic progress, the responsibility squarely lies with the PTI government,” Arif Yousaf said.

Copyright Business Recorder, 2026