Khyber-Pakhtunkhwa Boycotts NFC Sub-Group Talks Over Merged Districts

Khyber-Pakhtunkhwa province has decided to boycott deliberations of a sub-group of Pakistan's National Finance Commission (NFC) on the fiscal formula for merged districts.

K-P Finance Minister Muzzammil Aslam stated that the NFC process cannot proceed without resolving the issue of the merged former Federally Administered Tribal Areas (FATA) districts. He said Punjab, Sindh and Balochistan refused to include the 6.1 million population of these districts in the new NFC formula. The districts were merged into K-P in 2018 via the 25th Constitutional Amendment.

Aslam said K-P's NFC share should increase from 14.62% to 18.96% to reflect the added population. He claimed Rs980 billion that should have gone to K-P has been disbursed to other provinces instead, worsening underfunding in the deprived areas.

The merged districts have a 74% income poverty incidence rate, according to 2018-19 data from Pakistan's Planning Commission. Aslam linked the boycott to broader security challenges in the region following Afghanistan's 2021 regime change, which has exacerbated marginalization and fiscal inequities.

The standoff highlights tensions in Pakistan's fiscal federalism, with K-P demanding fairer resource distribution to address development gaps in the former FATA areas.