KP challenges extension of 7th NFC award in FCC

The Khyber Pakhtunkhwa government has formally challenged the ongoing extension of the 7th National Finance Commission award in the Federal Constitutional Court, arguing that its financial share fails to account for the post-merger reality of the former Federally Administered Tribal Areas. Following the 25th Constitutional Amendment in 2018, the province expanded significantly in terms of population, territory, and administrative responsibilities. However, the federal government continues to apply pre-merger figures to the allocation formula, leading to what the petition describes as  under-allocation of resources that violates the constitutional principle of finance following functions.

Advisor to the Khyber Pakhtunkhwa Chief Minister on Finance Muzammil Aslam stated that an estimated 964 billion rupees belonging to the province’s post-merger share has effectively been distributed among the other three provinces. Addressing a news conference at KP House, Aslam clarified that the province made no commitment to contribute toward federal grants from its provincial budget during the National Economic Council meeting. He noted that official meeting minutes indicate the Prime Minister committed to incorporating a revised allocation share for the province by December 2026 through a presidential ordinance.

Beyond the constitutional challenge, the provincial administration raised serious concerns over broader economic management, including an impending national wheat crisis. Aslam pointed out that failure by Punjab and Sindh to meet procurement targets has left PASSCO with only 1.7 million tonnes of stock, forcing the country to rely on wheat imports priced around 90 rupees per kilogram on the international market. He also criticised the federal decision to implement daily petroleum price adjustments, arguing that the strategy lacks long-term planning and fails to stabilise domestic fuel markets.