The KP government raised alarm about the ongoing shortages of federal transfers, exposing a persistent gap of more than Rs500 billion between estimated and actual revenues.
As per a news report, these shortages are mostly pertaining to KP’s share in federal taxes, net hydel profit (NHP), and grants for the merged districts.
Notwithstanding repeated promises, the federal government has persistently failed to meet the promised funds, affecting the province’s budget preparation and hindering development projects. Official reports state that the shortfall in federal transfers has been increasing year by year.
During the 2021–22 fiscal year, KP was allotted Rs1,118 billion but took in only Rs1,028 billion, creating a gap of Rs90 billion. During 2022–23, KP was assured Rs1,332 billion but got Rs1,185 billion, creating a gap of Rs147 billion.
Likewise, during 2023–24, the province got Rs1,129 billion against an allotment of Rs1,457 billion, creating a gap of Rs328 billion.
The current year, 2024–25, also registers a Rs481 billion deficit, with KP getting Rs1,273 billion compared to an allocation of Rs1,754 billion.
In the coming fiscal year 2025–26, the KP government has estimated the federal transfer at Rs1,802 billion, but the officials are in doubt whether the federal government will achieve this goal, as in the past.
Apart from federal transfers, KP is also expecting Rs129 billion in revenues at the provincial level, such as taxes and charges.
The province is also expecting Rs177.2 billion in foreign aid, out of which Rs165.5 billion will be loans and Rs11.6 billion grants.
Total receipts expected from federal, provincial, and foreign sources in FY 2025–26 stand at Rs2,119 billion.
Officials have cautioned that KP’s overdependence on federal transfers without constitutional guarantee of actual disbursement remains a hindrance to development, especially in priority areas and projects in the merged tribal districts.
