GILGIT — The Gilgit-Baltistan Cabinet has given unanimous approval to a Rs218 billion budget for fiscal year 2026-27, with the provincial government framing it as an austerity-driven plan focused on social welfare and job creation amid tight financial resources.
The approval came during a cabinet meeting where the Provincial Finance Secretary and the Additional Chief Secretary (Development) presented the budget’s main features, according to a statement from the Information Department GB. The plan sets aside Rs23 billion for development spending and Rs28 billion for non-development expenses, with the total Rs218 billion figure boosted by a federal government stabilization package that supplements the province’s own resources.
Chief Minister Amjad Hussain told the meeting that the budget places social welfare, support for vulnerable groups, and youth and women’s employment at its core, even as the province navigates limited fiscal space and continues to depend heavily on federal transfers to meet its development needs.
Spending Cuts Across the Board
In what officials called an unprecedented move for Gilgit-Baltistan, non-development budgets for every government department are being reduced by 30 percent to curb routine expenditure such as administrative costs and recurring departmental spending. Officials said the cut is intended to free up resources for development and welfare priorities without increasing the province’s overall financial burden. The administration signaled further belt-tightening may follow, citing rising oil prices and mounting economic pressure nationwide that has strained budgets across Pakistan.
Wages Rise, Pay Gaps Targeted
The government has raised the minimum wage for workers in both public and private institutions from Rs40,000 to Rs44,000 per month, a move aimed at cushioning employees against inflation and the rising cost of living in the region. It has also proposed steps to reduce pay disparities among government employees, a long-standing grievance among lower-tier public sector workers, and to ease financial strain on middle- and lower-income households more broadly.
Boost for Health, Education and Agriculture
Chief Minister Hussain said the budget channels significant funding into health, education, and agriculture — sectors officials described as central to improving living standards in the mountainous region. Key allocations include:
Rs170 million in additional funding for medicine procurement, aimed at addressing recurring shortages at public hospitals and health centers
A new health endowment fund intended to provide a sustainable, long-term source of financing for the health sector
A sharp increase in scholarships for high-performing students, part of an effort to widen access to higher education
Rs50 million proposed for water management projects to support farming, a sector that remains a major source of livelihood across Gilgit-Baltistan
First-Ever Social Protection Allocation
For the first time in the region’s history, the budget sets aside Rs1 billion for social protection programs designed to support economically vulnerable households. Officials also proposed launching a Rs4 billion endowment fund dedicated to the social sector, which they said would provide a recurring source of funding for welfare initiatives beyond the current fiscal year.
New Climate Funding Mechanism
The budget introduces a formal climate financing system for the province. Previously, development projects nominally reserved climate funds on paper without any actual deductions taking place in practice. Going forward, one percent of all development project funds will be deducted and channeled into a consolidated climate account, giving the province a dedicated pool of resources to respond to climate-related risks such as glacial lake outburst floods and erratic weather patterns. Separately, the government plans to replace older, fuel-heavy department vehicles with hybrid models, auctioning off the vehicles being phased out as part of a broader push to cut fuel costs.
Addressing Carried-Over Project Costs
The Chief Minister said long-pending “throw-forward” liabilities — unpaid costs accumulated from ongoing development projects that are carried forward year after year — have slowed the region’s development cycle for years, tying up funds that could otherwise go toward new initiatives. The new budget includes specific measures to clear this backlog and accelerate project completion, which officials said should help restart stalled schemes across the province.
Equal Funds for Government and Opposition
In another first for the province, development funds have been distributed equally between treasury and opposition lawmakers, a step officials say is intended to ensure balanced development across all constituencies regardless of party affiliation.
Chief Minister Hussain directed the Additional Chief Secretary (Development) and other relevant secretaries to enforce transparency and efficiency throughout the project cycle — from PC-1 preparation to tendering and execution — to guarantee that funds are used strictly for their intended development purposes.
Governor Gilgit-Baltistan Syed Mehdi Shah is expected to convene a session of the Gilgit-Baltistan Legislative Assembly later this month, where the provincial finance minister will formally present the 2026-27 budget. It will be taken up for debate by both treasury and opposition benches before final approval ahead of the start of the new fiscal year.
Finance Minister of Gilgit-Baltistan
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