PESHAWAR: Khyber Pakhtunkhwa has received Rs799.359 billion under the federal government’s war-on-terror allocation from 2010-11 through September 2026, according to official documents, as the province continues to face persistent militant threats.
The funds are intended to compensate KP for economic, infrastructure and other financial losses associated with terrorism. The provincial Finance Department said the annual allocation is part of an arrangement under which funds are also provided to other provinces.
KP receives additional 1% share
Under the 7th National Finance Commission (NFC) Award, agreed in December 2009 and implemented from July 2010, KP receives an additional 1% share from the federal divisible tax pool.
The additional allocation was introduced in recognition of the exceptional security and economic pressures faced by the province because of terrorism.
The amount released to KP has increased substantially over the years. According to the documents, the province received Rs112.296 billion during 2024-25 and Rs128.234 billion in 2025-26.
For the current fiscal year, 2026-27, the war-on-terror allocation has been estimated at Rs149.076 billion. Of this amount, Rs23.069 billion had been released during the first two and a half months of the financial year.
Funds difficult to track separately
Despite the scale of the allocation, the funds do not have a separate head in KP’s Consolidated Fund, according to sources.
The money is transferred into the provincial account along with other revenues, making it difficult to track its utilisation through a dedicated expenditure head.
The KP Finance Department said the size of the annual allocation is linked to Federal Board of Revenue collection targets. According to the department, the province receives the full amount when federal revenue targets are achieved.
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KP remains worst-affected by militancy
The funding comes as KP continues to face significant militant violence.
A Centre for Research and Security Studies report cited by Geo.tv recorded 475 violence-related fatalities and 151 violent incidents in KP during the second quarter of 2026, making it the country’s worst-affected region during that period.
The security situation has remained volatile in recent weeks.
A militant attack on Kohat Police Lines in September killed 22 people, including 16 police officials, while a suicide attack on an anti-smuggling check post in Dera Ismail Khan later that month killed 13 people, including women and a child, according to Geo.tv reports.
Security forces have also continued intelligence-based operations across the province. In late September, three militants were killed during an operation in North Waziristan, while other operations have targeted militant positions near the Afghan border, according to security sources and the military’s media wing, Inter-Services Public Relations (ISPR).
Police spending also increases
The province has also increased spending on policing amid the continuing security challenges.
Finance Adviser Muzzammil Aslam said the police operational budget had been doubled from Rs15 billion to Rs30.2 billion.
He added that the sanctioned strength of the provincial police had been increased to 139,318 posts.
The additional 1% share under the 7th NFC Award remains a key component of KP’s federal funding, reflecting the province’s continuing security and economic burden linked to terrorism.
