When constitutional entitlements become grievances

The letter written by Khyber-Pakhtunkhwa Chief Minister Sohail Afridi to Prime Minister Shehbaz Sharif is not merely an exchange of official correspondence over delayed fiscal transfers. It is a stark reminder of the widening gap between constitutional promises and fiscal practice in Pakistan's federal system. When constitutionally guaranteed rights begin to resemble discretionary favours, the consequences extend well beyond balance sheets, affecting governance capacity, social stability and national cohesion.

Federalism under the Constitution of Pakistan is anchored in predictability, equity and mutual trust between the federation and the provinces. The National Finance Commission (NFC) Award is the principal instrument through which this trust is operationalised. It is neither a political concession nor an administrative courtesy; it is a binding constitutional arrangement designed to ensure that provinces possess the financial capacity to discharge their responsibilities. Persistent deviations from this framework weaken not only provincial governance but also the credibility of the federation itself.

As highlighted in the CM's letter, K-P's budget for FY25-26 was framed strictly on the basis of constitutional entitlements - routine monthly NFC transfers, net hydel profit, oil and gas royalties and post-merger allocations for the newly merged districts (NMDs). These were not speculative assumptions or political gambits; they were binding fiscal obligations. Yet, actual releases have consistently fallen short, resulting in a reported shortfall of over Rs54 billion under the NFC alone.

This shortfall is not an accounting anomaly. It represents a material breach that has impaired cash management, disrupted budget execution and constrained service delivery in key sectors such as health, education, policing and social protection. Of even greater concern is the withholding or irregular release of routine monthly NFC transfers - a practice that finds no sanction in the Constitution and strikes at the core of cooperative federalism. When constitutionally mandated transfers become unpredictable, provinces are left to shoulder responsibilities without the means to fulfil them.

The consequences of this fiscal stress are most visible in the NMDs. Despite a provincial allocation of approximately Rs292 billion, federal releases reportedly amount to only Rs56 billion. This yawning gap undermines development, stabilisation and state consolidation. The merger was intended to correct decades of neglect; chronic underfunding risks turning a historic constitutional reform into a prolonged exercise in frustration.

At the heart of this debate lies K-P's demand for a larger share from the divisible pool - a demand that is constitutionally justified rather than politically motivated. The province has proposed a share in the range of 19 to 19.64 per cent, reflecting the significant increase in population following the merger of the former FATA, the accumulated development deficit in the merged districts, enduring security and reconstruction costs, and the economic damage suffered by industry and cross-border trade. Crucially, this demand draws legitimacy from Article 160 of the Constitution, which requires NFC allocations to be determined not solely on population but also on need, backwardness and equity.

With the merger, K-P's population has multiplied substantially, warranting a revised population-based share of approximately 19.4 per cent - a share that continues to be denied. On this account alone, the province should have received an additional Rs600 billion since the merger. Based on a divisible pool estimated at Rs7.24 trillion, an enhanced share would yield roughly an additional Rs0.29 trillion annually, enabling meaningful investment in education, healthcare, infrastructure, and economic revival in historically neglected regions. However, the absence of full financial integration of the merged districts has left development there proceeding at a snail's pace.

These fiscal constraints are unfolding at a time when K-P continues to bear extraordinary national burdens. The province remains on the frontline of counterterrorism efforts, absorbing the financial and administrative costs of maintaining internal security. It has also endured repeated natural disasters, requiring large-scale rehabilitation and reconstruction. Additionally, the management and support of temporarily displaced persons impose expenditures that are national in character but disproportionately borne by the province.

Political sociology and conflict studies offer sobering lessons in this context. Research has consistently established that grievances, if left unaddressed, generate a sense of deprivation. Over time, deprivation evolves into resentment, and resentment, if reinforced through repeated denial, manifests as agitation, alienation and, in extreme cases, radicalisation. This "theory of grievances" is not abstract; it is grounded in empirical evidence across societies grappling with marginalisation and exclusion.

States therefore invest heavily in mechanisms to gauge public sentiment and identify early warning signs of discontent. The rationale is simple: grievances ignored today become security challenges tomorrow. In regions with fragile socio-economic indicators and a history of conflict, fiscal neglect acts as an accelerant of instability rather than a neutral administrative lapse.

The ongoing debate around the 11th NFC Award presents an opportunity to recalibrate Pakistan's fiscal federalism. However, meaningful reform is impossible in an environment where even existing awards are not honoured in letter and spirit. Before debating new formulas and indicators, there must be an unequivocal commitment to implementing current constitutional obligations.

There is no smoke without fire. When a provincial government repeatedly flags fiscal strangulation and governance stress, dismissing such warnings as political rhetoric is neither prudent nor responsible. Fiscal stress translates directly into weakened service delivery, delayed development projects, unemployment and public frustration. Left unattended, this frustration does not dissipate; it accumulates.

The federation must recognise that releasing K-P's rightful share is not an act of generosity but a constitutional duty. Timely and unconditional disbursement of NFC transfers, net hydel profits, oil and gas royalties and NMDs allocations is essential to restore fiscal stability and reinforce the credibility of Pakistan's federal compact. At a time when the country can ill-afford new fault lines, adherence to constitutional commitments is not merely a sound policy - it is a national imperative.