PESHAWAR: The Khyber Pakhtunkhwa (KP) has once again demanded the federal government to release it rightful share if Rs628 billion under 7th National Finance Commission (NFC) Award.
KP’s tribal districts were promised Rs470bn under the Accelerated Development Program but during the last four fiscal years, only Rs69bn was provided. Additionally, KP has not received Rs57bn from the previous fiscal year’s net hydel profit, nor has it received Rs32.2bn earmarked for the divisible pool.
To discuss the issue, a consultative meeting, chaired by Advisor to Caretaker Chief Minister on Finance, Hamayatullah Khan was held. During the meeting, Secretary Finance, Mohammad Ayaz Khan, briefed the attendees on the current financial situation of the province.
The meeting was informed that 7th NFC Award was initially approved in 2010 when KP was not administering the tribal belt but the province is receiving the same funds even after the merger of tribal areas.
The Advisor stated that the Federal Board of Revenue collected Rs5.155 trillion in the first nine months of the last fiscal year. According to the NFC formula, KP’s share should have been Rs471.3bn. Nevertheless, KP received only Rs457.07bn, leaving an outstanding amount of Rs13.6bn.
Furthermore, the federal government has to provide thr province Rs18.6 billion for federal taxes collected during the last four years. This brings the total outstanding amount Rs32.2bn as KP’s share in tax collection.Â
Regarding development funds for tribal districts, the federal government had allocated Rs107bn. However, it has only provided KP with Rs60bn, leaving a shortfall of Rs47bn. This has led to cuts in development projects and forced KP to use Rs10bn from its current budget. Furthermore, KP received only RS19.85bn out of the designated Rs25bn for the Tribal Districts Development Fund. A shortfall of more than Rs5bn remains unpaid.
In short, the federal government has to provide KP a total of Rs144.4bn for ongoing expenses and development budgets from the fiscal years 2019-20 to 2022-23. Additionally, under the Fast Track Development Program, KP should have received Rs400 billion, but it has only received Rs75.5 billion, leaving a deficit of Rs324.5 billion.
Secretary Finance, Mohammad Ayaz Khan, has pointed out that Rs4.9bn has been paid in net hydel profit while Rs57bn still remains unpaid.
This financial discrepancy has strained the relationship between the KP and the federal governments, as the province seeks to receive its rightful share as per the constitutionally mandated NFC Award.
