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PESHAWAR: Khyber Pakhtunkhwa Chief Minister Sohail Afridi on Monday wrote a letter to Prime Minister Shehbaz Sharif, expressing concern over the non-payment of “constitutionally granted” federal funds and warning that continued delays are pushing the province into a “severe financial crisis”.
Since assuming office as chief minister last year, Afridi has repeatedly alleged that the federal government is delaying the release of funds for Khyber Pakhtunkhwa, particularly allocations for the merged districts under the National Finance Commission (NFC).
In the letter, the chief minister said persistent delays in federal transfers are adversely affecting the fiscal and governance crisis for the province.
“I [ Sohail Afridi] am compelled to place on record the deep and mounting concern of the government of Khyber Pakhtunkhwa regarding the persistent failure to release constitutionally guaranteed federal transfers, a failure that has now translated into an acute fiscal and governance crisis for the province”
In the letter, the chief minister underscored that the provincial budget for FY 2025-26 was framed and approved strictly on the basis of clear constitutional entitlements, including net hydel profit, oil and gas royalties, post-merger NFC shares, and regular monthly releases under the National Finance Commission.
“These were not discretionary assumptions but binding fiscal obligations. Contrary to these commitments, actual releases have consistently fallen short of budgeted levels. Of even greater concern is the withholding of routine monthly NFC transfers, a practice that finds no sanction in the Constitution and strikes at the core of cooperative federalism,” he stated.
According to the letter, against an entitlement of Rs658 billion from the federal divisible pool, Khyber Pakhtunkhwa has so far received only Rs604 billion, creating a shortfall of Rs54 billion. The chief minister said the gap has severely affected cash management and delayed the completion of development and social sector projects.
“This is not an accounting variance; it represents a material breach that has directly impaired cash management, disrupted budget execution, and constrained service delivery across critical sectors of governance,” the chief minister noted.
The chief minister also raised serious concerns over the situation in the merged districts, stating that while Rs292 billion was allocated at the provincial level, only Rs56 billion has so far been released by the federal government.
“This severe and continuing gap has undermined the provision of essential public services and development interventions in these historically marginalised areas, eroding the objectives of the merger and weakening national cohesion,” read the letter.
CM Afridi stressed that Khyber Pakhtunkhwa remains a frontline province in the fight against terrorism and continues to bear heavy national-level expenditures. He said the financial burden of counter-terrorism, flood rehabilitation, support for temporarily displaced persons and maintenance of law and order is being unfairly placed on the province, despite these being national responsibilities.
In view of the above, the chief minister said that his provincial govt expects immediate corrective action by the federal govt, including the full and unconditional release of all outstanding federal dues, particularly routine monthly NFC transfers, net hydel profit, oil and gas royalties, and allocations for the merged districts, strictly in accordance with constitutional provisions and agreed fiscal arrangements.
“Any further delay will only compound the province’s fiscal stress and weaken governance capacity at a critical juncture,” he warned.
