Displaced families’ rehabilitation: Centre tells KP it’s unable to share cost
ISLAMABAD: The federal government has expressed its inability to share the estimated cost of around Rs10 billion for the rehabilitation of displaced families, citing severe fiscal constraints.
This was confirmed by Muzamil Aslam, Advisor to the Chief Minister on Finance, Government of Khyber Pakhtunkhwa, while talking to Business Recordert after a meeting with Federal Minister for Finance and Revenue Muhammad Aurangzeb here on Tuesday.
The provincial government also demanded the release of pending payments under various heads, including the National Finance Commission (NFC) Award, Accelerated Implementation Programme (AIP) and net hydel profit.
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Senior officials from the Finance Division and the KP government were also present in the meeting.
Aslam said the KP government had incurred expenditures of around Rs10 billion on displaced persons and sought cost-sharing from the federal government. However, the centre categorically conveyed that it was not in a position to share the financial burden due to fiscal pressures.
He further stated that KP was entitled to receive approximately Rs689 billion under the NFC Award but had so far received only Rs634 billion, resulting in a shortfall of nearly Rs55 billion.
The Advisor said that the matter was discussed during the meeting and has been addressed which now requires only reconciliation on the part of Federal Board of Revenue (FBR).
The advisor added that the province also raised the long-standing issue of net hydel profit, amounting to about Rs78 billion per annually. In response, the federal government informed KP that it could release no more than Rs3 billion per month due to fiscal constraints.
He further said that the delay in payments under the head of AIP and merged areas development funds was discussed with federal minister for Planning, Development and Special Initiatives Ahsan Iqbal.
The matter was resolved to the greater extent as Iqbal assured of resolving these matters. Further the minister has directed to convene the committee for new schemes to approve and release AIP payment.
Official statement issued by the Finance Division noted that the discussion focused on a range of fiscal and development matters, including the timely release of funds under key development heads for merged districts, outstanding requirements linked to rehabilitation and support for temporarily displaced persons, and the broader framework of provincial entitlements and allocations, including those related to the National Finance Commission.
The Khyber Pakhtunkhwa team highlighted the operational and development imperatives in the merged districts and underscored the importance of predictable and timely releases to sustain ongoing schemes and meet pressing needs on the ground. They also drew attention to pending obligations in respect of displaced families and other related commitments that require streamlined coordination and resolution.
The Federal Minister for Finance and Revenue listened to the issues raised by the Khyber Pakhtunkhwa delegation and reaffirmed the Federal Government’s commitment to cooperative federalism and constructive engagement with the provinces.
He assured the Khyber Pakhtunkhwa team of the Finance Division’s support in pursuing and facilitating their rightful claims for allocations under the NFC and other relevant heads discussed during the meeting, in accordance with applicable rules, agreed frameworks, and due process.
The Federal Minister noted that effective coordination and timely reconciliation of accounts, where required, remain essential for smooth and transparent releases, and emphasized that the Federal Government remains mindful of the unique development and security-related challenges faced by Khyber Pakhtunkhwa, particularly in the merged districts.
The meeting also reviewed ongoing work and consultations on NFC-related matters, including the need to sustain momentum on technical discussions and sub-group engagements to advance consensus on key issues.
Both sides agreed to continue close coordination through relevant forums and technical channels to address outstanding matters on priority and to ensure that fiscal arrangements and releases support development objectives, service delivery, and stability.
The meeting concluded in a positive spirit, with a shared understanding to maintain regular engagement and to work jointly toward timely resolution of issues in the national interest.
Copyright Business Recorder, 2026