KP warns of court move over NFC share after FATA merger

Khyber Pakhtunkhwa has warned it may approach the Federal Constitutional Court (FCC) over its share in the National Finance Commission (NFC) following the merger of tribal districts, citing lack of consensus among provinces on additional resource allocation, The Express Tribune reported. 

The issue was raised by KP Chief Minister Sohail Afridi during meetings with Federal Finance Minister Muhammad Aurangzeb and the Planning Minister Ahsan Iqbal, where provincial financial concerns were discussed.

Officials said the chief minister sought an increase in KP’s NFC share from 14.62% to 18.96% after the 2018 merger of former tribal areas, which added around 6.1 million people to the province’s population. He also raised the possibility of legal action if the province is not compensated.

The provincial government is demanding around Rs980 billion in arrears since the merger and has linked its continued participation in NFC deliberations to resolution of the issue. It has also formally communicated its position to the federal government and indicated it may withdraw from discussions until progress is made.

The demand for an interim NFC award has faced resistance from other provinces. Representatives from Sindh and Punjab have opposed revising the current distribution formula or making retrospective payments, stating that such changes fall outside the mandate of the ongoing NFC process.

The 11th NFC is currently working to develop a new consensus-based formula for resource distribution, while the last award was finalised in 2010.

KP has also sought interim financial support from the federal government until a consensus is reached, arguing that current grants are insufficient to meet expenditures related to the merged districts.

In addition, the province raised concerns over net hydel profit payments, stating that it received around Rs36 billion in the last fiscal year compared to approximately Rs65 billion allocated to Punjab.

The provincial government further requested Rs15 billion to cover expenses related to internally displaced persons affected by past military operations.

The finance minister assured that the federal government would review the concerns and reiterated its commitment to supporting provinces in addressing financial challenges.