ISLAMABAD: The National Finance Commission’s (NFC) sub-group on the merger of former FATA— now the Newly Merged Districts (NMDs) — and their share in the federal divisible pool met on Tuesday to begin shaping recommendations for the next NFC award, official sources said.
The meeting, convened at the request of the Khyber Pakhtunkhwa (KP) government, was chaired by Khyber Pakhtunkhwa Chief Minister Sohail Afridi and attended by provincial secretaries, the federal finance secretary, and members of the NFC.
The sub-group was constituted to fast-track consensus on unresolved fiscal issues arising from the merger, with a mandate to finalise its recommendations for the NFC by mid-January 2026.
NFC: Govt says KP already getting its due share
Sources said the KP government reiterated its longstanding position that the existing NFC award must be updated to comply with constitutional requirements following the merger of the former FATA with KP.
It called for the merged districts to be treated as a separate component in future NFC awards, with allocations calculated independently based on the population, poverty, and other development indicators. This, the province argued, would align federal resource distribution with the Ten-Year Development Plan designed to ensure the social and economic integration of the former FATA.
KP argued that its share in the divisible pool should be revised upward by formally incorporating the population, poverty levels, and other socioeconomic indicators of the merged districts.
The province also demanded compensation for the period from 2019–20 to 2025–26, during which it claims the financial share of the merged districts was not fully reflected in NFC allocations.
The KP government has also proposed the creation of a 10-year special grant from the federal divisible pool to address what it described as “historical development deficits” in the merged districts. The grant, officials said, would bring the region on a par with the rest of KP and the country.
Officials said discussions are expected to continue in upcoming meetings as the sub-group works toward building consensus among the federation and provinces.
Copyright Business Recorder, 2025
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