The caretaker government of Khyber Pakhtunkhwa (K-P) has decided to engage with the federal government concerning the pending arrears amounting to Rs138 billion, seeking to raise its concerns about the deficit and financial hardships with the centre.
The funds encompass electricity profits, windfall earnings, oil levies, expenses for the merged districts, development resources, and the comprehensive allocation of national resources after the merger of erstwhile Fata into the province.
Moreover, the interim government seeks to secure its share of 19.64% -- instead of 14.62% -- under the National Finance Commission (NFC).
In a meeting chaired by K-P Chief Minister Justice (retd) Syed Arshad Hussain Shah on Monday, the administration reiterated its intent to secure an increased share of 19.64% from the NFC, in contrast to the current allocation of 14.62%.
The meeting was told that while the administrative integration of former Fata with the province has been completed, the process of financial integration remains pending. This incompleteness has led to financial hardships for the provincial government.
Moreover, concerns were raised regarding unfulfilled commitments made to the provincial government during the merger of the tribal districts, which have significantly impacted the development trajectory in these regions.
The merger of the former tribal areas has expanded both the population and geographical area of the province. The NFC share, based on these new metrics, is calculated at 19.64%. However, the province is currently receiving only 14.62%, resulting in a substantial deficit.
The financial requirements for the ongoing expenses in merged districts were estimated at Rs142 billion annually, but the allocated budget for the current fiscal year stands at only Rs66 billion.
Consequently, the provincial government faces a deficit of Rs76 billion for current expenditures.
The meeting was further informed that promises made for rapid development, including a committed annual Rs100 billion, remain unfulfilled.
Published in The Express Tribune, November 21st, 2023.
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