Key Takeaways
- Khyber Pakhtunkhwa government files constitutional petition against continued extension of 7th NFC Award.
- Claiming Rs964 billion, KP argues for increased share based on expanded province size and responsibilities.
- Petition seeks revision in horizontal distribution of Provincial Divisible Pool from merger date.
The Khyber Pakhtunkhwa (KP) government has filed a constitutional petition with the Federal Constitutional Court (FCC), challenging the continued extension of the 7th National Finance Commission (NFC) Award. The province is seeking Rs964 billion from the Federal Consolidated Fund (FCF).
According to the petition, the merger of the Federally Administered Tribal Areas (FATA) into KP in 2018 significantly increased its population and territorial expanse, necessitating a reassessment of its share under the NFC formula. The province argues that this change warrants an increase in its financial allocation.
The petition highlights the violation of the principle 'finance follows functions,' stating that despite the constitutional amendment, KP’s share under the NFC formula has not been updated to reflect the merged districts' needs and population. It claims that the existing formula continues to be used but with values from before the merger, thus excluding the new districts’ contributions.
KP is also seeking a revision in its share of the horizontal distribution of the Provincial Divisible Pool, effective from the date of the merger. The province maintains that this was not a discretionary grant or political concession but an automatic constitutional consequence of the 25th Amendment when read with the existing NFC formula.
The petition argues for recognition of an accrued constitutional entitlement rather than retrospective application. It claims that on May 31, 2018, the relevant constitutional facts changed, and the law in force — the formula under the 2010 Order — automatically applied to these new facts.
KP’s legal stance is that this petition goes beyond a provincial fiscal claim and seeks clarification from the FCC regarding whether the federal government's claim of a constitutional logjam is justified or if it is refusing its constitutional role. The province argues that the existing NFC formula does not need reopening but should be applied to reflect the post-merger reality.
The case has significant implications for the 18th Amendment, as KP’s victory could potentially nullify criticism of this amendment. If successful, the petition may lead to a substantial increase in the province's financial resources and better alignment with its expanded responsibilities.
