Peshawar/Islamabad: The Khyber Pakhtunkhwa (KP) government has claimed that the federal government owes the province trillions of rupees in outstanding dues as negotiations continue under the 11th National Finance Commission (NFC) Award framework.
Provincial officials raised the issue during recent NFC discussions, arguing that KP has long been deprived of its rightful financial share, particularly in relation to net hydel profits, merged districts’ development funds, and oil and gas revenues. According to KP representatives, these unpaid dues have placed immense pressure on the province’s finances and slowed development projects.
Long-standing Financial Disputes
KP maintains that successive federal governments failed to fully implement past NFC commitments. Officials say the province bears a disproportionate burden due to security operations, hosting internally displaced persons (IDPs), and managing infrastructure challenges in the merged tribal districts.
“The province has fulfilled its constitutional responsibilities, but the federal government has consistently delayed payments,” a senior KP official said, adding that the accumulated amount now runs into trillions of rupees.
Impact on Development and Governance
The provincial government argues that delayed payments have affected key sectors such as health, education, infrastructure, and social welfare, particularly in underdeveloped and post-conflict areas. KP leaders stress that timely release of funds is essential to ensure equitable development and financial stability.
Economists note that KP’s claims, if validated, could significantly alter the fiscal balance between the federation and provinces, especially at a time when Pakistan is facing broader economic challenges.
Federal Response and NFC Outlook
Federal authorities have acknowledged the concerns but emphasize the need for consensus among all provinces. Officials say the 11th NFC Award aims to strike a balance between federal obligations and provincial needs, taking into account population, poverty, revenue generation, and security-related expenditures.
The NFC talks are expected to continue in the coming weeks, with KP pushing for a clear roadmap to settle outstanding dues and revise the resource-sharing formula.
A Test for Fiscal Federalism
The dispute has once again highlighted tensions in Pakistan’s fiscal federalism framework. Analysts believe that resolving KP’s claims transparently could strengthen trust between the federation and provinces and set a precedent for fair resource distribution under the Constitution.
As negotiations move forward, all eyes remain on whether the 11th NFC Award can bridge long-standing divides and deliver a more equitable financial arrangement for the country’s provinces.
