AJK Passes Rs286bn FY27 Budget With Major Welfare Allocations

The Azad Jammu and Kashmir Legislative Assembly approved a Rs286 billion budget for fiscal year 2026-27 in Muzaffarabad, moving the annual financial plan through the house only hours after it was tabled by Finance Minister Chaudhry Qasim Majeed. The session was chaired by Speaker Chaudhry Latif Akbar and came at a politically sensitive time for the region, where public spending, subsidies and development delivery remain central public concerns.

The approved budget sets aside Rs250 billion for recurring expenditure and Rs36 billion for development spending. The development envelope includes Rs1 billion in foreign assistance, while the wider fiscal plan relies heavily on federal support, local tax receipts and internal resources to keep public services and development schemes running during the new financial year.

According to the budget breakdown, AJK expects Rs146 billion from its share in federal taxes through the variable grant, Rs60 billion from income tax, Rs15.2 billion from other taxes and Rs25 billion from internal receipts. Additional resources include Rs2 billion in water-use charges and Rs1.8 billion in capital receipts, including loans and advances.

Finance Minister Chaudhry Qasim Majeed told the assembly that the government had prepared the budget under serious resource constraints while keeping welfare, transparency and governance as its stated priorities. He said the Inland Revenue Department remained central to AJK’s revenue base, though the overall target for the outgoing year could not be fully achieved because of lower bank profitability, reduced electricity tariffs and weaker receipts from some property-related levies.

The budget gives the largest development allocation to the Communication and Works Department, which will receive Rs14 billion. Health has been allocated Rs4.1 billion, while education and energy and water resources will each receive Rs3.3 billion. Local Government and Rural Development has been assigned Rs3.2 billion, reflecting the government’s emphasis on infrastructure, service delivery and local-level projects.

A major share of development spending will go to schemes that are already under way. The government earmarked Rs26.28 billion, or 76 percent of the Annual Development Programme, for ongoing projects, while Rs8.71 billion will support new schemes. Officials expect 93 projects to be completed by the close of the current fiscal year and another 170 projects during 2026-27.

Recurring expenditure shows the scale of pressure on public finances. Education receives the largest current allocation at Rs57.25 billion, followed by Rs53.5 billion for pensions, Rs32.61 billion for the wheat flour subsidy and Rs25 billion for health. The government also announced that federal pay and pension increases would be extended to AJK employees and pensioners, a move likely to support household incomes but add to expenditure obligations.

The budget’s passage will shape the region’s policy direction over the next year, especially in education, health, infrastructure, subsidies and public-sector employment. Its success will depend on whether projected receipts materialise, whether revenue digitisation through the point-of-sale system delivers promised gains, and whether the government can complete development projects without creating fresh fiscal stress.