By Imran Nasir

ISLAMABAD – Pakistan’s Finance Ministry data shows that the Khyber Pakhtunkhwa (KP) province has received more than Rs 8.4 trillion in federal funds over the past 15 years, countering claims by the provincial government that it has been denied its financial dues, particularly under net hydel profit and other federal transfers.

The figures, covering the period from July 2010 to November 2025, indicate sustained federal support through multiple channels, including the National Finance Commission (NFC) Award, war-on-terror allocations, straight transfers, social protection programs, and funding for newly merged districts and internally displaced persons (IDPs).

According to the Finance Ministry, KP received Rs 5,867 billion as its share of the divisible pool under the 7th NFC Award, while an additional Rs 705 billion was paid since 2010 under the 1% war-on-terror allocation, recognizing the province’s frontline role in counterterrorism operations.

The province also received Rs 482.78 billion through straight transfers, including oil and gas royalties, gas development surcharge, and excise duty on natural gas.

Furthermore, the federal government spent Rs 481.433 billion in KP under the Benazir Income Support Programme (BISP) between FY2016 and FY2025, benefiting vulnerable households through unconditional and conditional cash transfers.

Since 2019, KP has been provided Rs 704 billion for the newly merged districts (formerly FATA), while Rs 117.166 billion has been allocated over the years to support IDPs displaced by military operations. Most recently, Rs 46.44 billion was released to the province on December 17, 2025, as part of a routine fortnightly NFC transfer.

In total, the Finance Ministry says, KP has received Rs 8.4 trillion under these heads, adding that the province has received 100% of its entitled share, along with additional federal support beyond constitutional obligations.

Security Crisis and Political Tensions

The funding debate comes at a time when Khyber Pakhtunkhwa is facing one of its worst law-and-order situations in years, with near-daily militant attacks targeting security forces, police, and civilians across the province, particularly in its southern and border districts.

Pakistan has repeatedly accused the Afghan Taliban of harbouring Tehreek-e-Taliban Pakistan (TTP) militants and allowing them to use Afghan territory to launch cross-border attacks inside Pakistan—allegations that Kabul has denied.

The prolonged security crisis has severely impacted business activity and tourism in KP, despite the province’s scenic northern and northeastern regions, which are considered among Pakistan’s top tourist destinations.

Centre–Province Dispute

The KP government has accused the federal government of withholding its financial dues, particularly regarding net hydel profit, and has linked fiscal constraints to its ability to address security and development challenges.

Federal officials, however, argue that Finance Ministry data demonstrates consistent and substantial financial support, and stress that effective governance, security management, and development planning remain critical amid rising militancy.

Analysts say the ongoing centre–province tensions, combined with deteriorating security conditions, risk further undermining economic recovery and public confidence in KP, unless accompanied by a coordinated political and security strategy.