KP suffers Rs54.4bn shortfall in NFC transfers: CM Afridi
DLP Report
PESHAWAR
Khyber Pakhtunkhwa Chief Minister Sohail Afridi has written a detailed letter to the Prime Minister Shehbaz Sharif of Pakistan expressing serious concern over the continued failure to release constitutionally mandated federal transfers, warning that the delays have pushed the province into an acute fiscal and governance crisis.
According to the letter, the Chief Minister said the provincial budget for the fiscal year 2025–26 was framed and approved strictly on the basis of constitutionally guaranteed fiscal entitlements, including Net Hydel Profit, oil and gas royalties, post-merger National Finance Commission (NFC) shares, and regular monthly transfers under the NFC Award.
He stressed that these allocations were binding constitutional obligations rather than discretionary assumptions.
However, he noted that actual releases had consistently fallen short of budgeted levels, adding that the withholding of routine monthly NFC transfers had no constitutional sanction and undermined the principles of cooperative federalism.
The chief executive of the province pointed out that against KP’s NFC entitlement of Rs658.4 billion from the federal divisible pool, the province had so far received only Rs604 billion, leaving a shortfall of Rs54.4 billion.
He said this was not a minor accounting variance but a material breach that had directly affected cash management, disrupted budget execution and constrained service delivery in key sectors.
Aridi said the impact had been most severe in the merged districts, where development, stabilisation and state consolidation were recognised as national priorities.
Despite a provincial allocation of Rs292 billion for these areas, federal releases stood at only Rs56 billion to date. He warned that the widening gap had undermined essential public services and development initiatives in historically marginalised regions, weakening the objectives of the merger and eroding national cohesion.
The chief minister further noted that KP continued to remain on the frontline of counter-terrorism efforts while also bearing extraordinary expenditures related to flood response and rehabilitation, as well as the management and support of temporarily displaced persons.
He said these were national responsibilities, yet the financial burden was being borne disproportionately and unsustainably by the province.
In light of the situation, Mr Afridi urged the federal government to take immediate corrective measures, including the full and unconditional release of all outstanding federal dues. He specifically called for the timely disbursement of routine monthly NFC transfers, Net Hydel Profit, oil and gas royalties, and allocations for the merged districts in strict accordance with constitutional provisions and agreed fiscal arrangements.
CM KP cautioned that any further delay would compound the province’s fiscal stress and weaken governance capacity at a critical juncture.
