K-P demands Centre clear payments

Adviser says federation’s promise to disburse funds remains unfulfilled

PESHAWAR:

The caretaker government of Khyber-Pakhtunkhwa (K-P) termed the seventh NFC award unconstitutional and demanded of the Centre an immediate interim financial award for the province following the merger of the tribal areas.

After a consultative meeting, the provincial government released the details of the arrears, Rs700 billion, and urged the federal government to make the payment immediately.

The former tribal areas, comprising agencies and frontier regions were merged with the K-P through the 25th Constitutional Amendment. The government had promised more funds from the NFC for the development of these areas.

However, the provincial government said that from the financial year 2019-20 to the financial year 2022-23, the federal government owed Rs144.4 billion to the province in the ongoing and development budget of the tribal districts.

The consultative meeting was chaired by Finance Adviser Himayatullah Khan. It was attended by NFC vMusharraf Rasool, Senior Strategic Advisor Javed Iqbal, Additional Chief Secretary Zubair Asghar Qureshi, and other senior officials.

Finance Secretary Ayaz Khan informed the meeting about the expenditure in the tribal districts during different periods.

He said that in the first nine months of the last financial year, the Federal Board of Revenue (FBR) recovered Rs5,155 billion. Under the seventh NFC Award, the provincial in that amonut was Rs471.3 billion but it received only Rs457.7 billion.

Ayaz Khan said that Rs107 was allocated for the current and development expenditures of the former tribal districts, out of which only Rs60 billion had been received, while Rs47 billion was still outstanding.

Therefore, the finance secretary continued, the development funds for the tribal districts were cut and to Rs10 billion were taken from the current budget. Besides, Rs17 billion was allocated for the TDPs, while no payment was made.

The finance adviser told the meeting that the promises of development funding at the time of merger of the former tribal districts had not been fulfilled yet. “There is a significant gap in the payments since the merger,” he added.

According to the Article 161 of the Constitution, the payment under the head of the net hydel profit to the provinces was the responsibility of the Centre. The province still seeks Rs57 billion under this head.

In 2018, the Federally Administered Tribal Areas (FATA) were merged into the K-P province. However, despite this merger, the share of financial resources allocated to the newly merged tribal districts was not provided to K-P. As a result, K-P was burdened with the responsibility of funding the expenses of these newly incorporated tribal districts using its already limited resources.

The provincial government has prepared its case on the basis of 2017 census as well as FBR receipts in the year 2022-23.

Published in The Express Tribune, August 1^st, 2023.