PESHAWAR: Khyber Pakhtunkhwa’s (K-P) Finance Advisor, Muzammil Aslam, accused the federal government on Saturday of sidelining the province in the federal budget due to its opposition status, claiming Islamabad’s economic stability is deteriorating.
Speaking at a post-budget press conference, Aslam criticized the federal government’s allocation of only Rs550 million for K-P’s development projects, forcing the province to rely on its own resources. He revealed that K-P achieved 93% of its revenue targets independently but faced a Rs90 billion shortfall in its National Finance Commission (NFC) share.
Despite financial constraints, the provincial government spent Rs20 billion from its treasury for tribal areas and allocated Rs70 billion for merged districts without federal assistance. Aslam clarified that K-P has not taken new loans, with current borrowings tied to past agreements. Future loans, he said, would only fund major development initiatives.
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Comparing budgets, he noted the Centre’s Rs1 trillion outlay dwarfed K-P’s Rs547 billion plan. An NFC meeting has been scheduled for August, following the province’s request.
Aslam highlighted the unresolved dues, noting that the federal government fails to release over Rs47 billion annually for tribal areas, despite its promises. However, he acknowledged a first-time allocation of Rs70.4 billion for merged districts.
The province inherited Rs170 billion in loans from previous governments but established a Rs1.5 billion fund to manage repayments. Salaries and pensions were raised by 10% and 7%, mirroring federal adjustments.
For the upcoming fiscal year, K-P unveiled a Rs195 billion development budget, including Rs500 billion worth of schemes. Aslam noted Rs145 billion had already been released for settled districts, with Rs26.9 billion disbursed for merged areas.
Calling it K-P’s “largest-ever development budget,” Aslam said liabilities had been reduced from 10 years to 5.1 years, signaling improved fiscal management.
