• Province says Rs10.4bn expense linked to settlement of displaced individuals from Bajaur, Tirah Valley
• Federal govt additionally guidelines out larger web hydel revenue funds to province
ISLAMABAD: The federal authorities has declined Khyber Pakhtunkhwa’s request for Rs10.4 billion in extra expenditure linked to the settlement of displaced individuals from Bajaur and the Tirah Valley following safety operations, asking the provincial administration to fulfill these bills from its personal sources.
The Heart additionally expressed its lack of ability to extend provincial transfers on account of web hydel revenue past Rs3bn monthly presently being given to the province attributable to fiscal limitations and authorized precincts. The Centre, nevertheless, indicated to disburse about Rs26bn on an pressing foundation on account of the Accelerated Implementation Program (AIP) for the event of KP’s newly merged districts, beforehand referred to as Federally Administered Tribal Areas (Fata).
This adopted a collection of conferences between the federal and provincial management over the past two days, starting with a session led by Prime Minister Shehbaz Sharif and KP Chief Minister Sohail Afridi on Monday. The provincial authorities made a pitch for restoration of a complete of Rs426bn “excellent federal liabilities payable to KP”.
Finance Minister Muhammad Aurangzeb and Planning Minister Ahsan Iqbal then sat down with KP’s group, led by KP Finance Minister Muzzammil Aslam, on Tuesday to comply with up on these calls for.
Knowledgeable sources mentioned the province additionally demanded an early requisition of the second assembly of the Nationwide Finance Fee (NFC).
Mr. Aurangzeb reportedly requested Mr. Muzzammil to finish the suggestions of a working group he headed on the query of necessities of merged districts and promised to name an NFC assembly quickly.
The provincial authorities argued that Fata’s merger with KP in Could 2018 elevated the provincial inhabitants from round 31 million to 37m, with the world increasing from 74,521 sq. kilometers to 101,741. It argued that this could have robotically and proportionately elevated KP’s share in NFC to 19pc from the prevailing 14.6pc. Nevertheless, this hole of round 4.5pc created a
colossal burden. It mentioned this 12 months’s finances estimate for present expenditures of merged districts stood at Rs143bn, however the Heart had allotted solely Rs80bn, even lower than final 12 months’s Rs105bn. For AIP 2025-26, the federal government had made a Rs100bn dedication however disbursed solely Rs37bn in seven months.
Individually, KP reported that about 2,000 displaced households had been staying at Babakhel Camp in North Waziristan, whereas one other 15,000 households from the world had been receiving Rs20,000 monthly, amounting to round Rs4.2bn a 12 months.
The province mentioned it spent Rs19bn in FY24 and FY25 and an extra Rs10.4bn to this point this 12 months because of the Bajaur and Tirah operations, with out federal help.
Of the Rs426bn declare, KP mentioned the most important chunk of Rs194.5bn pertained to federal excise obligation on crude oil beneath the 18th Constitutional Modification, which it mentioned had remained unimplemented since FY11. It mentioned one other Rs75bn pertained to a windfall levy on crude oil manufacturing and Rs64bn was linked to water provide from the Galiyat Growth Authority to Murree since 1947.
‘Cooperative federalism’
A press release issued by the Ministry of Finance mentioned the assembly between the monetary groups of federal and provincial authorities targeted on a variety of fiscal and growth issues, together with the well timed launch of funds beneath key growth heads for merged districts, excellent necessities linked to rehabilitation and help for quickly displaced individuals, and the broader framework of provincial entitlements and allocations, together with these associated to the NFC.
The KP group highlighted the operational and growth imperatives within the merged districts and underlined the significance of predictable and well timed releases to maintain ongoing schemes and meet urgent wants on the bottom.
In addition they drew consideration to pending obligations in respect of displaced households and different associated commitments that require streamlined coordination and backbone.
Mr. Aurangzeb “reaffirmed the federal authorities’s dedication to cooperative federalism and constructive engagement with the provinces”, the assertion mentioned.
He assured KP of his help in pursuing and facilitating their rightful claims for allocations beneath the NFC and different related heads mentioned in the course of the assembly, in accordance with relevant guidelines, agreed frameworks and due course of.
The minister additionally emphasised that “efficient coordination and well timed reconciliation of accounts, the place required, stay important for clean and clear releases, and emphasised that the federal authorities stays conscious of the distinctive growth and security-related challenges confronted by KP, notably within the merged districts”.
The assembly additionally reviewed ongoing work and consultations on NFC-related issues, together with the necessity to maintain momentum on technical discussions and subgroup engagements to advance consensus on key points and agreed to proceed shut coordination by way of related boards and technical channels to handle excellent issues on precedence and to make sure that fiscal preparations and releases help growth goals and repair supply.
Printed in Daybreak, February 4th, 2026
