Key Takeaways
- Khyber Pakhtunkhwa (KP) has challenged the continued implementation of the 7th National Finance Commission (NFC) Award.
- The petition argues that KP’s financial share should be revised to reflect its increased population and responsibilities post-merger.
- Adviser to the Chief Minister on Finance Muzammil Aslam claims KP has lost Rs. 964 billion under the current arrangement.
The Khyber Pakhtunkhwa (KP) government has filed a petition in the Federal Constitutional Court (FCC), challenging the extension of the 7th National Finance Commission (NFC) Award following the merger of the Federally Administered Tribal Areas (FATA) into the province. The court has admitted the petition for hearing.
According to Muzammil Aslam, Adviser to the Chief Minister on Finance, KP’s financial share under the NFC Award does not reflect its increased population and development responsibilities post-2018 constitutional amendments. He stated that while the existing NFC formula remains unchanged, it should be applied using updated data from the merged districts.
Aslam highlighted that KP had not committed any share of a proposed Rs. 1.1 trillion grant to the federal government at the National Economic Council (NEC) meeting and therefore did not include it in its provincial budget. He also noted that Prime Minister Shehbaz Sharif promised to revise KP’s NFC share within six months, by December 2026.
The petition seeks to determine whether extending the 7th NFC Award after 2018 is constitutional and if the federation has fulfilled its obligations under Article 160 of the Constitution. Aslam emphasized that the current arrangement violates the principle that public finances should follow administrative responsibilities, leaving KP underfunded despite its expanded roles.
In a press conference in Islamabad, Aslam criticized the federal government’s handling of the wheat and energy sectors. He warned of a looming wheat crisis due to Punjab and Sindh failing to meet procurement targets, stating that PASSCO currently holds only 1.7 million tonnes of wheat. Aslam suggested that Pakistan may have no option but to import wheat.
He also criticized the government’s proposed daily petroleum pricing mechanism, arguing that authorities had failed to develop a workable implementation plan. Aslam maintained that KP has effectively lost Rs. 964 billion under the current arrangement and is facing significant financial challenges due to inadequate funding for its expanded responsibilities.
KP has effectively lost Rs. 964 billion under the current arrangement.
Muzammil Aslam, Adviser to the Chief Minister on Finance
