Khyber Pakhtunkhwa has received a combined Rs6.57 trillion from the federal divisible pool since July 2010, including its National Finance Commission (NFC) share and additional compensation for War on Terror-related costs, shared the Ministry of Finance.
According to data released by the Ministry of Finance on Saturday, between July 2010 and November 2025, the federal government transferred Rs5,867 billion to Khyber Pakhtunkhwa (KP) as its share under the NFC Award, along with an additional Rs705 billion to offset the province’s War on Terror-related expenditures.
“Under the 7th NFC Award, Khyber Pakhtunkhwa’s share was determined at 14.62% of the provincial share in the divisible pool,” read a statement.
“In recognition of the extraordinary burden borne by the province during the War on Terror (WoT), an additional 1% of the undivided divisible pool was allocated exclusively to KP.
“Although the 7th NFC Award was originally envisaged for a five-year period, the absence of consensus on subsequent NFC Awards (8th, 9th, and 10th) necessitated the continued implementation of the 7th NFC Award framework. Accordingly, KP continues to receive its due share, including the additional allocation for WoT,” read the statement.
The ministry shared that the federal government released provincial NFC shares on a fortnightly basis, and no outstanding liabilities exist in this regard.
“Most recently, an amount of Rs46.44 billion was released to the Government of Khyber Pakhtunkhwa (GoKP) on 17 December 2025, underscoring the federal government’s adherence to timely disbursement commitments,” it said.
The ministry said that in addition to NFC transfers, the federal government has ensured uninterrupted flow of straight transfers to KP. “From July 2010 to November 2025, an amount of Rs482.78 billion has been transferred on account of royalties on oil and natural gas, gas development surcharge, excise duty on natural gas, and other related heads,” it said.
The ministry maintained that the federal government has extended substantial financial support to KPK beyond the NFC framework.
Following the merger of former FATA into KP after the 7th NFC Award, and in the absence of a revised NFC formula, the federal government has been financing the expenditures of the newly merged districts from its own NFC share, said the ministry.
“Since 2019, an amount of Rs704 billion has been transferred to GoKP for NMDs. Internally Displaced Persons (IDPs), while an additional Rs117.166 billion has been provided to KP over the years to support IDPs.”
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The finance ministry shared that despite constitutional devolution, the federal government continues to invest in KP welfare and development:
“Rs115 billion has been allocated to KP over the past fifteen years from the Federal PSDP for development projects of a provincial nature.
“Through the Benazir Income Support Programme (BISP), an amount of Rs481.433 billion has been spent in KP from FY2016-25 on unconditional and conditional cash transfers.”
The ministry shared that the federal government remains committed to strengthening the NFC framework through consultation.
“The 11th NFC was constituted by the President of Pakistan on 22 August 2025 and held its inaugural meeting on 4 December 2025. During the meeting, it was decided to constitute a dedicated Sub-Group to make recommendations on the merger of former FATA/Newly Merged Districts and their share in the divisible pool.
“At the request of the Government of Khyber Pakhtunkhwa, the first meeting of this Sub-Group is scheduled for 23 December 2025, with the Finance Minister, Khyber Pakhtunkhwa, serving as the designated convener, demonstrating a collaborative and transparent approach toward resolving outstanding fiscal matters.
“The Ministry of Finance reiterates that the Federal Government remains fully committed to equitable resource distribution, fiscal federalism, and sustained support for Khyber Pakhtunkhwa, ensuring that provincial needs, particularly those arising from security challenges, displacement, and administrative integration, are addressed in a timely and responsible manner,” it concluded.
Days ago, Chief Minister Khyber Pakhtunkhwa Muhammad Suhail Afridi said, the federal government owes over Rs2,200 billion to Khyber Pakhtunkhwa in head of net hydel profit (NHP) and another unpaid amount of Rs1,375 billion under National Finance Commission (NFC) to the merged districts of the erstwhile Federal Administered Tribal Area (FATA).
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