ISLAMABAD:
The federal and Khyber-Pakhtunkhwa governments on Tuesday settled their differences over the release of funds to merged districts, but remained at odds over the provision of an additional Rs.15 billion sought by the provincial authorities for temporarily displaced persons (TDPs).
After a tense meeting between KP Chief Minister Sohail Afridi and Prime Minister Shehbaz Sharif a day earlier, the political arch-rivals appeared to bridge their differences over the release of non-National Finance Commission (NFC) funds.
Finance Adviser to KP Chief Minister Muzzammil Aslam met Finance Minister Muhammad Aurangzeb and Planning Minister Ahsan Iqbal separately.
The KP government demanded immediate disbursement of funds under the Annual Development Plan and Accelerated Implementation Program (AIP) for the merged districts of the province.
Planning Minister Ahsan Iqbal said his ministry had already approved the release of Rs7 billion and asked the KP officials to take up the matter with the federal finance ministry for immediate disbursements.
However, there was a lack of commitment from the federal government to provide the additional Rs 15 billion sought by KP to meet the needs of people temporarily displaced from various regions due to intelligence-led operations to flush out terrorists.
The KP government has demanded that the federal government provide Rs 15 billion for providing services and food to the temporarily displaced people of Bajaur, Khurram and Tirah Valley, Muzzammil Aslam said after the meeting with the federal cabinet ministers.
However, Aslam said the finance ministry told him it had no additional funds due to fiscal constraints.
“We have already spent Rs10 billion on TDPs this financial year and another Rs15 billion is needed, but the provincial government is also facing fiscal constraints,” the finance adviser said.
It had been decided to initially pay Rs265,000 per displaced family to about 19,000 households, Muzzammil said.
Aslam said he was also seeking Rs4.5 billion for the running costs of the Bakakhel camp in North Waziristan, which continues to operate and caters for 2,000 displaced families.
The financial adviser said another 15,000 displaced families from North Waziristan are staying with host families. He said the monthly allowance of Rs 20,000 for 17,000 families amounts to Rs 348 million per month borne by the KP government since 2022.
The adviser said that Rs19 billion in expenditure had been incurred by the KP government in the past and another Rs10.4 billion was spent in this financial year on account of Bajaur and Tirah Valley operations. However, no releases have been made by the federal government, he added.
The federal government has denied any large-scale operation in any part of KP, but said intelligence-based operations were underway, averaging 200 such operations daily across the country.
Due to harsh weather conditions, the major military operations have not been launched.
The KP government drew attention to outstanding obligations in respect of displaced families and other related obligations that require streamlined coordination and resolution, according to a statement issued by the Ministry of Finance after the meeting.
The provincial government also informed the federal authorities about the funding needs of the merged districts which are the direct responsibility of the Centre.
The complete current budget estimate for FY 2025-26 is Rs 143 billion, excluding TDPs. In contrast, the federal government has allocated only Rs80 billion for the current expenditure budget, which is even less than the actual expenditure in the last financial year in these districts.
But Iqbal said that during PTI’s four-year tenure, the newly merged districts’ annual funding remained frozen at Rs24 billion, which he said has increased to Rs28 billion a year under the current government.
The Planning Minister also ruled out any discrimination against the KP government and said the actual releases were higher than those made during the PTI tenure.
The planning minister said there would be joint ownership of the Accelerated Implementation Program (AIP) for development of merged districts, but the steering committee would be headed by KP Chief Minister Sohail Afridi.
Iqbal said that the KP government has been asked to convene the meeting of the steering committee to approve new projects for the fourth quarter. He maintained that the federal government wanted to fund high-impact youth-focused projects in these merged districts.
We have agreed to disburse funds to the AIP, including Rs 7 billion for training the police, Iqbal said.
The Planning Minister said that out of the annual Rs16.8 billion allocation under the Annual Development Plan, the money has already been disbursed for the first two quarters. He said the KP government has been asked to secure disbursements from the federal finance ministry as the planning ministry has already sanctioned the funds.
In an official release, the finance ministry said Muhammad Aurangzeb held a meeting with Muzzammil Aslam.
The KP team highlighted the operational and developmental imperatives of the merged districts and emphasized the importance of predictable and timely releases to sustain ongoing schemes and meet urgent needs on the ground, according to the finance ministry.
The discussion focused on a number of fiscal and development issues, including timely release of funds under key development heads of merged districts, outstanding claims linked to rehabilitation and support for temporarily displaced persons, and the broader framework of provincial rights and allocations, including those related to NFC, it added.
The Federal Minister of Finance and Revenue listened to the issues raised by the KP delegation and reaffirmed the Federal Government’s commitment to cooperative federalism and constructive engagement with the provinces.
Aurangzeb assured the KP team of Finance Division’s support to pursue and facilitate their rightful demands for allocations under NFC and other relevant heads discussed during the meeting, in accordance with existing rules, agreed framework and due process.
The KP government had sought approval of Rs426 billion in non-NFC arrears, including net hydel profit of Rs85 billion, and asked to speed up the process of release of hydel profit.
The Federal Finance Minister noted that effective coordination and timely reconciliation of accounts, where necessary, remains essential for smooth and transparent releases, stressing that the Federal Government remains mindful of the unique development and security-related challenges faced by KP, especially in the merged districts.
Both sides agreed to continue close coordination through relevant forums and technical channels to address outstanding issues with priority and to ensure that fiscal arrangements and releases support development goals, service delivery and stability, the finance ministry said.
