KP proposes interim NFC arrangement to bridge Rs38bn shortfall

February 26, 2025 (MLN): An interim financial arrangement under the National Finance Commission (NFC) has been proposed to address the halted fund allocations for the merged districts, which are receiving Rs66 billion in the current budget while their expenditures stand at Rs104bn, creating a significant financial shortfall.

This proposal was put forward by Khyber Pakhtunkhwa’s Finance Advisor, Muzzammil Aslam, during a meeting with Federal Finance Minister Muhammad Aurangzeb in Peshawar to discuss key financial matters concerning the province.

Muhammad Aurangzeb acknowledged the province’s commendable financial management and emphasized the federal government’s commitment to working collaboratively with all provinces.

Aurangzeb also assured that Khyber Pakhtunkhwa’s concerns regarding the National Finance Commission (NFC) will be reviewed, according to the press release issued today.

Muzzammil Aslam highlighted that the Accelerated Implementation Program (AIP) and Annual Development Program (ADP) funds allocated for the merged districts have been halted.

He also emphasized that the NFC Award cannot be finalized within the next three months and urged the federal government to settle provincial financial matters in advance for the next budget cycle.

Additionally, Aslam stressed the importance of consulting provinces beforehand regarding tax implementation, pension, and salary-related matters.

During the meeting, the Federal Finance Minister also congratulated Khyber Pakhtunkhwa on the successful implementation of the National Finance Agreement and Agricultural Income Tax.

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