Khyber Pakhtunkhwa has formally placed its key financial demands before the federal government during the inaugural session of the 11th National Finance Commission (NFC), calling for the inclusion of the former FATA region in the award and substantial revision of provincial allocations.
The KP government has urged that the weightage for its role in the fight against terrorism be increased from the existing 1% to 3%, while seeking a rise in its overall share from 14.62% to 19.62%. The province has also demanded resolution of long-standing issues related to Article 161 of the Constitution.
KP further recommended amending the formula for distribution of excise duty, revisiting excise duty on natural gas, and settling disputes linked to windfall levies. It also proposed that a monthly schedule for NFC meetings be established to ensure consistent progress.
Arguing that the current NFC arrangement is not in line with Article 160, the KP government maintained that excluding the former FATA districts has rendered the award “constitutionally contentious.”
Both KP and Sindh have opposed any proposal to reduce provincial shares in the federal divisible pool.
Under the existing distribution formula, the Centre receives 42.5% of federal resources while the provinces collectively receive 57.5%. Of the provincial share, Punjab receives 51.74%, Sindh 24.55%, KP 14.62% (including 1% for counterterrorism efforts), and Balochistan 9.09%.
