The Khyber Pakhtunkhwa (KP) government has challenged the extension of the 7th National Finance Commission (NFC) Award in the Federal Constitutional Court. The province filed the petition after the merger of former FATA areas into KP through the 25th Constitutional Amendment.
KP officials argue that the province’s financial share does not reflect its increased population, territory, and development responsibilities after the merger.
The provincial government believes the current NFC formula uses outdated figures. It wants the court to determine whether KP deserves an increased share based on its expanded size and new responsibilities.
KP Raises Concerns Over Financial Allocation
KP Finance Adviser Muzammil Aslam criticized the federal government over ongoing wheat and energy concerns. He said poor management had created serious economic challenges and claimed that wheat imports remained the only option to prevent a possible shortage.
Speaking at a press conference at KP House, Aslam said KP’s financial share of Rs964 billion went to Punjab, Sindh, and Balochistan.
He also clarified that KP did not promise any grant share to the federal government during the National Economic Council (NEC) meeting.
According to Aslam, Punjab and Sindh committed around 88% of the grant amount. However, KP did not include any such commitment in its provincial budget.
He added that NEC minutes mentioned a plan to revise KP’s NFC share within six months. After that, the President would issue an ordinance to increase the province’s share following the FATA merger.
Petition Questions Current NFC Formula
The KP government argues that the merger of FATA significantly changed the province’s population and administrative responsibilities. However, authorities have not updated KP’s NFC share according to these changes.
The province believes this situation violates the principle of “finance follows functions.” This principle suggests that financial resources should increase when government responsibilities expand.
KP maintains that it does not want to change the NFC formula. Instead, it wants the government to apply the existing formula using updated population, territory, and development figures.
The province argues that the current calculation still represents pre-merger KP. As a result, it excludes the merged districts that became part of KP on May 31, 2018.
Wheat Crisis Concerns Add Pressure
Aslam also highlighted concerns over the country’s wheat supply. He said Punjab and Sindh failed to meet wheat procurement targets despite receiving approval under agreements with the International Monetary Fund.
He said PASSCO currently holds around 1.7 million tonnes of wheat. However, after fulfilling KP’s requirement, available reserves may become limited.
According to Aslam, Pakistan may need to import wheat at around Rs90 per kilogram from international markets to avoid supply issues.
He also criticized the government’s approach to petroleum pricing. Aslam said daily price adjustments lacked a proper strategy and failed to provide stability for consumers.
The KP government believes its petition goes beyond financial demands. It wants clarification on the constitutional role of the NFC and the responsibility of the federal government in ensuring fair resource distribution.
The case could become an important development in Pakistan’s federal financial system. It may determine how provinces receive resources after major constitutional and administrative changes.
