Federal govt rejects KP CM’s allegation of delaying NFC funds

ISLAMABAD: The Ministry of Finance on Saturday reaffirmed the federal government’s commitment to ensuring timely financial transfers to Khyber Pakhtunkhwa (KP) in accordance with the National Finance Commission (NFC) Award, dismissing allegations of delays in fund disbursement.

The clarification came a day after KP Chief Minister Muhammad Sohail Afridi urged the federal government to release funds under the NFC Award, claiming that quarterly transfers for the financial year 2025–26 had not yet been made.

In a press statement, the Ministry of Finance said KP continues to receive its full share under the NFC Award, including the additional allocation for the War on Terror (WoT).

According to the ministry, provincial NFC shares are released on a fortnightly basis, and there are no outstanding liabilities in this regard. Most recently, Rs46.44 billion was released to the Government of Khyber Pakhtunkhwa (GoKP) on December 17, 2025.

From July 2010 to November 2025, a total of Rs5,867 billion has been transferred to KP as its share of the divisible pool. During the same period, Rs705 billion was provided to the province under the War on Terror head.

In addition to NFC transfers, the federal government has ensured uninterrupted straight transfers to KP. Between July 2010 and November 2025, Rs482.78 billion was transferred on account of royalties on oil and natural gas, gas development surcharge, excise duty on natural gas, and other related heads.

The statement further noted that following the merger of former FATA into KP after the 7th NFC Award, and in the absence of a revised NFC formula, the federal government has been financing the expenditures of the Newly Merged Districts (NMDs) from its own NFC share. Since 2019, Rs704 billion has been transferred to GoKP for NMDs.

Additionally, Rs117.166 billion has been provided to KP over the years to support Internally Displaced Persons (IDPs), while Rs115 billion has been allocated to the province over the past fifteen years from the Federal Public Sector Development Programme (PSDP) for provincial development projects.

Through the Benazir Income Support Programme (BISP), Rs481.433 billion has been disbursed in KP between FY 2016 and FY 2025 under unconditional and conditional cash transfer schemes to support vulnerable households.

The ministry also said the 11th NFC was constituted by the President Asif Ali Zardari on August 22, 2025, and held its inaugural meeting on December 4, 2025. During the meeting, it was decided to form a dedicated sub-group to make recommendations regarding the merger of former FATA/Newly Merged Districts and their share in the divisible pool.

At the request of the KP government, the first meeting of the sub-group is scheduled for December 23, 2025, with the KP Finance Minister serving as the convener, reflecting a collaborative and transparent approach to resolving outstanding fiscal issues.