PESHAWAR: The Khyber Pakhtunkhwa (KP) government has announced plans to raise the issue of decades-long underdevelopment in tribal districts at the 11th National Finance Commission (NFC), recently formed by the federal government to determine a new revenue-sharing formula between the Centre and provinces.
Federal authorities officially notified the 11th NFC on August 22, tasking it with devising a new award for distribution of divisible federal resources. According to Dr. Musharraf Rasool Cyan, KP’s representative in the NFC, the province has not yet received its rightful share for the tribal districts following the merger of FATA into KP under the 25th Constitutional Amendment.
“We must correct this imbalance,” Dr. Cyan said, emphasizing that development in merged districts is crucial for long-term peace and stability. He revealed that the region has faced over 70 years of underinvestment, with per capita investment falling to less than half the national average.
Huge Funding Shortfalls Identified
KP has identified a funding gap of Rs1.2 trillion for development in merged districts, calling for a special development package similar to the Aghaz-e-Huqooq Balochistan initiative. Provincial officials also criticized the Federal Board of Revenue (FBR) for its failure to meet tax targets, arguing that improved tax collection could resolve federal resource shortages.
Adviser to the Chief Minister on Finance, Muzammil Aslam, stressed the need to align the NFC Award with changes in population, geography, and economic realities. Chief Minister Ali Amin Khan Gandapur has consistently raised this issue at high-level forums, including the Council of Common Interests (CCI) and the National Economic Council (NEC), securing a promise for an NFC meeting in August.
Financial Disparities Over Six Years
Between 2019 and 2024, KP received Rs3.046 trillion based on a 14.62% share, while its revised entitlement of 19.64% amounts to Rs4.092 trillion, creating a shortfall of Rs1.046 trillion. Even after federal grants of Rs437 billion, KP faces a net deficit of over Rs609 billion.
Moreover, the federal government’s Accelerated Implementation Programme (AIP) fell short by Rs568 billion, further widening the development gap. KP also spent Rs372 billion on operational costs in the tribal districts but was reimbursed only Rs331 billion, leaving an additional Rs41.4 billion deficit.
A Call for Equity and Stability
KP’s leaders insist that addressing these funding gaps is essential for bridging economic disparities and ensuring sustainable peace in the tribal belt. The provincial government has vowed not to accept an extension of the 7th NFC Award without a fair inclusion of merged districts in its share.
