The Khyber Pakhtunkhwa (KP) government has raised concerns over the persistent shortfalls in federal transfers, revealing a consistent gap of over Rs500 billion between projected and actual receipts.
According to a news report, these shortfalls are largely related to KP’s share in federal taxes, net hydel profit (NHP), and grants for the merged tribal districts.
Despite repeated assurances, the federal government has consistently fallen short of delivering the committed funds, impacting the province’s financial planning and delaying development initiatives. According to official documents, the gap in federal transfers has been widening over the years.
In the fiscal year 2021–22, KP was allocated Rs1,118 billion but only received Rs1,028 billion, resulting in a Rs90 billion shortfall. In 2022–23, KP was promised Rs1,332 billion but received Rs1,185 billion, causing a Rs147 billion gap.
Similarly, in 2023–24, the province received Rs1,129 billion out of an allocation of Rs1,457 billion, resulting in a Rs328 billion shortfall. The current fiscal year, 2024–25, also sees a Rs481 billion shortfall, with KP receiving Rs1,273 billion against an allocation of Rs1,754 billion.
For the upcoming fiscal year 2025–26, the KP government has projected a federal transfer of Rs1,802 billion, but officials remain skeptical about whether the federal government will meet this target, given past performance.
In addition to federal transfers, KP expects to generate Rs129 billion from provincial revenues, including taxes and fees. The province also anticipates securing Rs177.2 billion through foreign assistance, comprising Rs165.5 billion in loans and Rs11.6 billion in grants. The total receipts projected for FY 2025–26 from federal, provincial, and foreign sources amount to Rs2,119 billion.
Officials have warned that KP’s reliance on federal transfers without ensuring actual disbursement continues to hamper development, particularly in key sectors and projects in the merged tribal districts. Chief Minister Ali Amin Gandapur has repeatedly called on the federal government to ensure timely and full payment of all constitutionally mandated transfers to the province.
