K-P's case for a fair share in 11th NFC award

As the federal and provincial governments approach the 11th National Finance Commission (NFC) award, Khyber-Pakhtunkhwa is not seeking favour; it is demanding fairness. The province has absorbed the former Federally Administered Tribal Areas (FATA), carried the burden of protracted conflict and inherited widespread underdevelopment. That its share in the divisible pool remains tethered to a 2009 formula is not just inequitable; it betrays the constitutional spirit of equitable federalism.

The districts merged from FATA into K-P are among Pakistan's most underdeveloped areas. Multi-dimensional poverty in these newly merged districts highlights severe deficits across income, living conditions, utilities, education and women's empowerment. Female literacy in many merged districts ranges between 12-17 per cent, far below the provincial average of roughly 37 per cent. Health infrastructure remains critically low: hospital beds and doctor-to-patient ratios are far below K-P norms, with many facilities lacking electricity, water, essential medicines and qualified staff. Economic deprivation is stark.

Prolonged conflict, trade embargoes with Afghanistan and insecurity have shuttered hundreds of businesses, including 229 industrial units reported closed in recent years. Per capita income in these districts lags significantly behind settled districts, with households facing extreme poverty, limited livelihood opportunities and high out-of-school rates. These indicators reveal why the merged districts require sustained and enhanced federal transfers.

Even before the merger, educational indicators were alarming. Female literacy in some ex-FATA districts was as low as 7.8 per cent, and primary and secondary school enrollment was extremely low for girls. Across K-P, literacy rates show persistent gender gaps: overall provincial literacy is approximately 51 per cent, with female literacy roughly 37 per cent. The merged districts drag down these averages, reflecting decades of neglect. To meet constitutional obligations, K-P must invest heavily in schools, teachers and remedial programmes in these areas. Healthcare access is also critically low. Many health facilities were damaged or destroyed during conflict, with staffing levels insufficient for maternal, child and general healthcare. Addressing these deficits requires major investment: new hospitals, medical staff, equipment, medicines and preventive health services. NFC allocations must reflect this urgent need.

The economic consequences of prolonged conflict, trade disruptions and structural underdevelopment have been severe. Closure of trade routes and embargoes with Afghanistan disrupted livelihoods, reduced provincial revenue and constrained commerce sustaining thousands of households. The industrial sector suffered: hundreds of units were forced to close, including 229 reported industrial closures in recent years. This economic damage compounds social deprivation, forcing K-P to spend more on social protection and development. Even after large-scale counter-terrorism operations, K-P bears ongoing security costs: surveillance, policing, rehabilitation, reconstruction of infrastructure and cross-border management. Thousands of schools, hospitals, roads and markets were damaged or destroyed, while families lost homes, income — and hope. The previous one per cent "war-on-terror" grant assumed temporary costs. The reality is that ongoing security, reconstruction and social rehabilitation continue to strain the provincial budget. The social and economic cost of terrorism has long-term developmental repercussions.

The 18th Amendment mandated decentralisation: the federal government should focus only on its constitutionally mandated domains. Yet, 15 years on, Islamabad continues as if little has changed. Seventeen federal divisions and 60 attached departments were supposed to close post-devolution, but the federal government retains them, inflating expenditure and creating distrust. Provinces like K-P are expected to deliver more with fewer resources, while the federation overspends on functions it no longer owns, exacerbating fiscal imbalance.

Given these indicators — ultra-low female literacy (12-17 per cent in merged districts), deficient health-care infrastructure, shuttered industries, disrupted trade, deep poverty and ongoing security burdens — K-P's demand for a larger share of the divisible pool is constitutionally justified. K-P's proposed share, in the range of 19-19.64 per cent, seeks to reflect population growth from the FATA merger; the development deficit in merged districts, enduring security and reconstruction costs; economic damage to industry and trade; and the constitutional mandate under Article 160 that allocations consider population, needs and equity. An additional approximately Rs0.29 trillion, based on a divisible pool of Rs7.24 trillion, would allow K-P to invest in education, health, infrastructure and economic revival in neglected areas.

The federal government often cites austerity, IMF conditions or fiscal pressures, overlooking a structural imbalance: provinces deliver more with less, while the federation retains revenue and functions devolved under the 18th Amendment. A fair NFC Award for K-P is not charity; it is constitutional equity. It ensures education, health, social services, economic revival and security for millions in areas devastated by decades of conflict and neglect.

The 11th NFC award must reflect reality. And reality demands justice.