Budget proposals: PBF asks KP govt to focus on industrialisation

PESHAWAR: Chairman, Pakistan Business Forum (PBF) Khyber Pakhtunkhwa chapter, Ashfaq Paracha has urged the provincial government to make industrial development a central pillar of the upcoming budget, stating that sustainable economic growth, employment generation, export enhancement, and revenue expansion cannot be achieved without a strong industrial base.

Talking to media on Tuesday, Paracha said that Khyber Pakhtunkhwa possesses enormous economic potential due to its abundant natural resources, strategic location, hydropower generation capacity, mineral wealth, marble reserves, gemstones, tobacco production, agriculture, and tourism. However, despite these advantages, the province remains one of the least industrialised regions of Pakistan.

He noted that the KP Government presented a budget of more than Rs 2.1 trillion for FY 2025-26, including an Annual Development Programme (ADP) of approximately Rs 547 billion. While the budget focused on social services and infrastructure, the business community believes that industrial development did not receive the level of attention required to transform the provincial economy.

“Industrialisation is the backbone of every successful economy. Unfortunately, KP continues to export raw materials while value addition, processing, and manufacturing take place in other provinces. This deprives our people of employment opportunities, export earnings, and economic prosperity,” said Paracha.

He observed that KP’s industrial sector has suffered long from inadequate infrastructure, high energy costs, and inconsistent gas supply, limited access to finance, insufficient industrial estates, weak logistics facilities, and lack of investor-friendly mechanisms. Several industrial clusters, particularly in marble processing, furniture manufacturing, engineering products, food processing, pharmaceuticals, and mineral-based industries, continue to face challenges that hinder their growth and competitiveness.

Paracha said that despite possessing some of the world’s finest marble and significant mineral deposits, the province still exports a large proportion of its resources in raw or semi-processed form. As a result, the benefits of value addition, job creation, and export growth are captured elsewhere.

The PBF provincial chief emphasised that the upcoming Budget 2026-27 should introduce a comprehensive industrial revival package aimed at strengthening the productive sectors of the economy.

He proposed the establishment of a dedicated Industrial Development Fund with significant allocations for industrial infrastructure, modernisation of existing industrial estates, and accelerated development of Special Economic Zones.

He further stressed the need for competitive electricity tariffs for industries operating in KP. “It is unfortunate that a province contributing significantly to the country’s hydropower generation is unable to provide affordable energy to its own industries. Competitive energy rates are essential for industrial expansion and export competitiveness,” he added.

Paracha called for special incentives for small and medium enterprises (SMEs), which account for the majority of business activity and employment generation. He recommended subsidised financing, technology upgradation support, and simplified regulatory procedures to encourage entrepreneurship and industrial investment.

The PBF also urged the government to establish modern mineral processing, marble finishing, gemstone cutting, and food processing facilities across the province. Such initiatives, he said, would help maximize the value of local resources while creating thousands of skilled and unskilled jobs.

Highlighting the issue of unemployment, Paracha stated that KP has a huge young populations, with millions of young people entering the job market over the next decade. “The government alone cannot absorb this workforce. Industrial growth is the most effective mechanism for creating sustainable employment opportunities and reducing poverty,” he remarked.

He further proposed industry-linked vocational training programs, export facilitation centers, improved logistics infrastructure, dry ports, warehousing facilities, and one-window investor services to attract domestic and foreign investment.

According to Paracha, industrial development would not only generate employment but also increase provincial revenues, reduce dependence on federal transfers, improve exports, and strengthen the overall economic resilience of the province.

Paracha further urged the provincial government to engage chambers of commerce, trade bodies, industrial associations, and the private sector in budget consultations to ensure that industrial development becomes a key driver of economic progress in Khyber Pakhtunkhwa.

“A strong industry means a strong economy, more jobs for our youth, higher exports, and greater prosperity for the people of Khyber Pakhtunkhwa. The time has come to place industry at the heart of provincial economic policy,” he concluded.

Copyright Business Recorder, 2026