ISLAMABAD: Khyber Pakhtunkhwa (KP) government, terming the current National Finance Commission (NFC) award as ultra vires to the Constitution, set a deadline of April 2025 for convening the Commission, and warned of reaching the Supreme Court in case of failure.
KP Finance Department organised a high-level policy dialogue on the “NFC Award and Way Forward”, bringing together key policymakers, economists, and stakeholders to discuss the implications and future direction of the NFC Award, aimed to critically evaluate the current NFC framework, highlighting the need for fiscal decentralisation from a federal perspective.
While major changes have occurred at a macroeconomic level, the NFC formula has not been updated accordingly, prompting discussions on the need for reforms.
Addressing on the occasion, Chief Minister Ali Amin Gandapur demanded that the current NFC award needs to be updated to reflect post-merger scenario of erstwhile FATA with Khyber Pakhtunkhwa province. In case of failure to convene the Commission, KP would give a surprise in May 2025, he added. Gandapur stressed that the constitution is a social contract between the state and its people, ensuring their fundamental rights. He lamented that repeated violations of the constitution have gone unpunished, eroding public trust and fostering resentment.
He also stated that the Apex Committee has already acceded to his request for the initiation of working for final conclusion of the 10th NFC award and is hopeful for that. He stressed that the federal government has not so far provided the due share in the operational and salaries expenditure to be given to the law-and-order forces working in ex-FATA.
Referring to past mistakes, he warned that failure to learn from history could lead to further instability. Highlighting Khyber Pakhtunkhwa’s financial grievances, he stated that despite the merger of former tribal areas into the province, a move endorsed by the entire nation, promised commitments remain unfulfilled even after six years.
The merger increased the province’s population by 5.7 million (a three percent rise) and expanded its land area by 22,000 square kilometres (3.8 percent). As per this growth, KP’s share in the NFC Award should have increased from 14 percent to 19.6 percent, yet the province has not received its due share.
Gandapur stated that the federal government had pledged an annual allocation of Rs100 billion for the accelerated development of the merged districts, amounting to Rs600 billion over six years, but only Rs132 billion has been disbursed so far.
Additionally, the province receives only Rs66 billion annually instead of the committed Rs88 billion for operational expenses in these districts. He warned that this neglect by the federal government is fostering distrust among the people of the merged areas.
The chief minister highlighted his government’s efforts to generate resources despite financial constraints, saying that the provincial government has increased its revenue by 55 per cent, cleared Rs75 billion in outstanding dues from the previous administration, and established Pakistan’s first Debt Management Fund, initially allocating Rs30 billion with plans to raise it to Rs150 billion.
Expressing dissatisfaction over the delayed NFC Award, Gandapur criticised the federal government for avoiding its constitutional responsibility.
He warned that if a new NFC Award is not announced by April, KP will take decisive action in May. Touching upon role of the people of Khyber Pakhtunkhwa in the war against terrorism, Gandapur remarked that while the province continues to bear the brunt of terrorism, its contributions ensure the safety of the rest of the country. He lamented that instead of receiving due recognition, the province faces injustices.
On environmental matters, he pointed out that KP houses 45 per cent of the country’s forests, acting as a major carbon sink. The government spends Rs330 billion annually on forest conservation and has invested Rs650 billion in afforestation efforts. He advocated for an NFC allocation for environmental conservation, as is the case in India.
Copyright Business Recorder, 2025
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