Peshawar
Advisor to the Chief Minister Khyber Pakhtunkhwa for Finance and Inter-Provincial Coordination, Muzzammil Aslam, has said that the province’s economic performance is directly influenced by the federal government’s policies, which have remained unsatisfactory over the past three years.
Speaking at a post-budget press briefing in Peshawar, he stated that the national growth rate of 2.7% has been deemed disappointing by both economists and media analysts, adding that without improved national growth, economic performance cannot be expected to improve.
He criticized the federal government for completely ignoring Khyber Pakhtunkhwa in its development budget. Out of a national development allocation of Rs. 1,000 billion, only Rs. 550 million were earmarked for Khyber Pakhtunkhwa under the Public Sector Development Program (PSDP).
“The federal government has two key responsibilities toward the province—PSDP funding and development allocations for the merged districts—yet both have been neglected,” he added.
Muzzammil Aslam pointed out that while the Federally Administered Tribal Areas (FATA) have been administratively merged into Khyber Pakhtunkhwa, financial integration has not taken place.
“The federal government released only Rs. 66 billion for the merged districts’ recurring expenses, whereas the province had to contribute an additional Rs. 47 billion from its own resources. Furthermore, Rs. 20 billion were spent from the province funds in AIP in the absence of federal funds,” he explained.
Highlighting the federal government’s shortfall in tax collection, Aslam said that a Rs. 1,000 billion shortfall at the national level resulted in a Rs. 90 billion revenue loss for Khyber Pakhtunkhwa. However, despite these setbacks, the provincial government initiated significant financial reforms, including the establishment of a Debt Management Fund, where Rs. 150 billion have been allocated.
Responding to criticism regarding provincial borrowing, the advisor clarified that Khyber Pakhtunkhwa’s total debt stands at Rs. 709 billion, which is proportionate to the size of its economy. “No new debt has been taken; what we received are disbursements of previously agreed loans. Future borrowing will only be undertaken for mega projects and will not be diverted elsewhere,” he assured.
On the Sehat Card program, he shared that while the actual expenditure stood at Rs. 24 billion, Rs. 53 billion have been allocated in the new budget to ensure its smooth continuation. Presenting the budget figures, he said that the total revenue target for FY 2025–26 is Rs. 2,119 billion—21% higher than the previous year. Federal transfers are expected to be Rs. 1,506 billion, while the province has set a local revenue target of Rs. 129 billion.
Total expenditure is estimated at Rs. 1,962 billion—19% more than the previous year—with current expenditure at Rs. 1,415 billion, including Rs. 1,255 billion for settled districts and Rs. 160 billion for the merged districts.
Speaking on the provincial annual development program, the finance advisor praised Chief Minister Ali Amin Gandapur’s leadership. He said the CM conducted extensive consultations at district, divisional, and constituency levels with public representatives to identify priority projects, resulting in the most comprehensive planning process in the province’s history.
A record Rs. 547 billion has been allocated for development, which is 31% more than the previous year. Of this, Rs. 39.6 billion has been earmarked for the merged districts.
Reflecting on the government’s performance over the past year, Aslam said that despite initial skepticism and concerns regarding the continuity of flagship programs such as the Sehat Card and timely salary disbursement, the government delivered on its promises. “More than 400 under-construction projects in the settled districts are being completed with enhanced development funds,” he said.
Regarding consultations with PTI founding chairman Imran Khan, Aslam said that without his input, the KP budget would remain incomplete.
“It is vital to seek his guidance, as I was part of financial consultations during his federal tenure and continue to focus solely on the province’s financial well-being,” he noted.
Concluding, Muzzammil Aslam credited the Chief Minister’s leadership for effectively advocating Khyber Pakhtunkhwa’s concerns at the federal level. He mentioned that a Council of Common Interests meeting is expected this June, with the issue of Net Hydel Profit on the agenda. The federal government has also promised to announce the 11th NFC Award. Moreover, the National Economic Council has authorized Rs. 70 billion this month for the ADP and AIP of the merged districts—a development he termed encouraging.
