PESHAWAR: Adviser to the Khyber Pakhtunkhwa chief minister on finance and inter-provincial coordination Muzzammil Aslam on Monday complained that the federal government was not providing the provincial government with its due share in development funds for merged tribal districts.

In a statement, Mr Aslam also said that Khyber Pakhtunkhwa had spent Rs20 billion from its own funds on development in tribal districts and around Rs40 billion on current expenditure, which the federal government had not reimbursed.

He said the federal government claimed that there had been a 15 per cent decline in the production of major crops, which included a 30 per cent decline in cotton production alone, so an additional $5 billion would have to be spent on cotton imports.

The aide to the CM also said a drop in wheat production would lead to the expenditure of $3 billion on wheat imports.

Aslam complains next PSDP has no new projects for provinces

“Overall, the decrease in agricultural output will force Pakistan to import goods worth $10 billion, representing a loss of Rs2,800 billion to the country and its farmers,” he said.

Mr Aslam said in the past, the federal government put the inflation rate at 4.5 per cent or 4.7 per cent, but currently, it claimed that the rate would rise to 7.5 per cent next year.

He said Pakistan’s GDP in the current year was Rs114 trillion and was expected to increase to Rs129 trillion next year.

“Despite this, only Rs1 trillion has been allocated for development expenditure, and the federal government is not launching any new projects. Likewise, no new projects have been allocated to the provinces,” he said.

The adviser to the chief minister said of the Rs1 trillion development budget, Rs120 billion was from savings that were not provided as fuel subsidies, which were being used to build roads in Balochistan.

This means that the actual Public Sector Development Programme (PSDP) is Rs880 billion only, according to him.

Mr Aslam said under the “Uraan Pakistan” programme, discussions were held on sports, water, and the environment, and Rs65 billion was initially allocated to higher education. “This has now been slashed to Rs45 billion—without any consultation with the provinces,” he said.

He pointed out that the government had earlier said that projects which are more than 75 per cent complete would be prioritised, yet two road projects in Khyber Pakhtunkhwa that were over 90 per cent complete have been deleted, which he called a clear injustice and raised during today’s meeting.

The aide to the CM wondered if the federal government claimed that inflation was being brought down to one per cent, why the interest rate was still at 11 per cent.

He said that Rs2-2.5 trillion in savings from interest payments this year should be redirected to development projects—but it was not happening.

Mr Aslam complained that according to the planning ministry, 118 development projects had been scrapped, while the government was claiming that the growth rate would be 4.2 per cent next year, with inflation being at 7.5 per cent.

He said exports wouldn’t increase significantly, but imports would rise, and $39.5 billion in remittances had been estimated.

Regarding budgetary allocations, the aide to the CM said out of Rs1 trillion PSDP, Khyber Pakhtunkhwa would receive just Rs540 million.

He said Sindh had been allocated Rs47.1 billion, Gilgit-Baltistan Rs37 billion and Azad Jammu and KashmirRs45 billion, and the tribal districts just Rs70 billion of which only Rs34 billion had actually been disbursed this year.

Mr Aslam said that this year, Punjab’s development budget was Rs1 trillion and Sindh’s Rs1.1 trillion, while Khyber Pakhtunkhwa’s development budget totaled Rs433 billion.

He said this year alone, Khyber Pakhtunkhwa would receive Rs300 billion less from the federal government.

The chief minister’s adviser said Rs42 billion less had been received under the NFC Award, and the federal government had collected Rs1 trillion less in taxes until May, meaning KP would receive Rs90 billion less this year.

He demanded that the federal government announce the NFC Award for tribal districts (erstwhile Fata)and immediately provide the share based on population, or at the very least, fulfil the allocations announced in the budget.

Mr Aslam said as the parties ruling the centre didn’t form a government in KP, both settled and tribal districts were unfairly denied funds.

He insisted that the KP government had complied with IMF conditions and even the federal government had acknowledged that.

Published in Dawn, June 3rd, 2025