Khyber Pakhtunkhwa’s (K-P) Finance Advisor, Muzammil Aslam, said on Saturday that the federal government is ignoring the province due to political opposition.
Addressing a post-budget press conference, Aslam stated that the federal government’s economic position is no longer stable, with the growth rate dropping to 2.7%.
He claimed K-P was largely ignored in the federal development budget, receiving only Rs550 million, forcing the province to increase its own development spending due to lack of federal support.
Aslam said the province achieved 93% of its revenue targets through its own sources.
However, K-P received Rs90 billion less than its share under the National Finance Commission (NFC). He added that the provincial government spent Rs20 billion from its own treasury for tribal areas and used Rs70 billion for the merged districts without any federal support.
He clarified that the province had not taken any new loans. The loans currently being received were from agreements signed previously. Any future loans, he said, would only be taken for major development projects.
Comparing the budgets, Aslam noted the Centre’s budget stands at Rs1 trillion, while K-P’s is Rs547 billion. He said an NFC meeting had been scheduled for August on K-P’s request.
The K-P chief minister, he said, raised the issue of pending dues with the Centre, which had promised payments. Despite this, he said, annual funds exceeding Rs47 billion were never released by the federal government for tribal areas.
Aslam acknowledged that for the first time, the Centre had allocated Rs70.4 billion for the merged tribal districts. He clarified that Rs170 billion in loans were inherited from previous governments.
A Rs1.5 billion fund had been set up to manage debt repayments. He said the province is satisfied with its NFC share and sees it as the key to resolving its fiscal challenges.
Salaries and pensions, he said, have been increased by 10% and 7% respectively, in line with federal adjustments.
For the new fiscal year, the K-P government has included development schemes worth Rs500 billion in its Rs195 billion development budget.
This year, Rs145 billion out of the allocated Rs156 billion for settled districts had already been released. For merged tribal areas, Rs41 billion was allocated, with Rs26.9 billion disbursed.
He described it as the largest development budget in K-P’s history. “When we took office, the throw-forward liabilities stretched over 10 years — they’ve now been reduced to 5.1 years,” he concluded.
