The Khyber Pakhtunkhwa government has asked the Federal Constitutional Court to determine whether its share under the National Finance Commission Award should be revised following the merger of the former FATA districts.
KP Moves Court Over NFC Award Extension
The Pakistan Tehreek-e-Insaf (PTI)-led government in Khyber Pakhtunkhwa (KP) has challenged the extension of the 7th National Finance Commission (NFC) Award in the Federal Constitutional Court (FCC), arguing that the province’s constitutional and financial status changed significantly after the merger of the former Federally Administered Tribal Areas (FATA) in 2018.
According to the petition, KP is seeking a judicial determination on whether its share under the NFC Award should be increased to reflect its expanded population, geographical area, and administrative responsibilities following the 25th Constitutional Amendment.
Petition Questions Post-2018 NFC Extension
The province argues that it has consistently maintained at every NFC forum that extending the 7th NFC Award beyond 2018 is ultra vires (beyond legal authority) and should be corrected.
The petition contends that despite the constitutional merger of the former FATA with KP, the province’s share under the NFC formula has not been recalculated to include the merged districts. As a result, KP claims it has received fewer financial resources than required for its increased responsibilities.
The filing also cites the internationally recognized fiscal principle of “finance follows functions,” arguing that financial allocations should correspond to the responsibilities assigned to a government.
KP Says Formula Need Not Change
The provincial government has clarified that it is not seeking to alter the existing 7th NFC formula itself.
Instead, it argues that the current formula should simply be applied using updated constitutional data that reflects KP’s post-merger population, territory, and development indicators. According to the petition, the values currently used still represent KP as it existed before the FATA merger on May 31, 2018.
The case also asks the Federal Constitutional Court to clarify the constitutional responsibilities of the Federation, the President, and the NFC under Article 160 of the Constitution, arguing that the commission should remain a periodic and evidence-based mechanism rather than relying on outdated assumptions.
Muzammil Aslam Criticizes Federal Government
Speaking at a press conference at KP House in Islamabad, KP Adviser to the Chief Minister on Finance Muzammil Aslam criticized the federal government over what he described as worsening wheat and energy challenges.
He claimed that KP’s financial share of Rs964 billion had effectively been distributed among Punjab, Sindh, and Balochistan.
Aslam also said the province never committed to contributing a share of the reported Rs1.1 trillion grant to the federal government during the National Economic Council (NEC) meeting. According to him, KP did not include such an allocation in its provincial budget, and the commitment was not part of the official NEC minutes.
PM’s Commitment Mentioned in NEC Minutes
According to Aslam, the NEC minutes state that the Prime Minister committed to incorporating a revised NFC share for KP within six months, by December 2026. He added that the plan includes the President issuing an ordinance to increase the province’s share following the FATA merger.
Concerns Over Wheat and Energy
Aslam also warned of a possible wheat shortage, claiming that Punjab and Sindh failed to procure their targeted wheat stocks despite approval from the International Monetary Fund (IMF).
He said the Pakistan Agricultural Storage and Services Corporation (PASSCO) currently holds only 1.7 million tonnes of wheat and argued that Pakistan may have no option but to import wheat, which he said is currently available in international markets at around Rs90 per kilogram.
In addition, he criticized the federal government’s policy of reviewing petroleum prices on a daily basis, saying it had failed to develop a sustainable pricing mechanism.
Case Could Have Wider Constitutional Significance
Legal observers note that the petition goes beyond a provincial financial dispute and raises broader constitutional questions about the implementation of Article 160, which governs the National Finance Commission.
The outcome could help clarify whether NFC resource distribution should automatically reflect major constitutional changes, such as the FATA merger, and whether the commission is required to update provincial allocations in line with evolving demographic and administrative realities.
