The Ministry of Finance said on Saturday that the federal government released provincial shares under the National Finance Commission (NFC) on a fortnightly basis, adding that “no outstanding liabilities exist in this regard”.

The statement from the ministry came a day after Khyber Pakhtunkhwa Chief Minister Sohail Afridi accused the federal government of stalling development in the merged tribal districts by not disbursing funds under the NFC resource-distribution formula for the current fiscal year.

In the statement released on Saturday, the ministry reaffirmed the federal government’s “continued commitment to ensuring timely, transparent, and sustained financial transfers” to KP under the NFC Award and beyond.

It said that under the 7th NFC Award, KP’s share was determined at 14.62 per cent of the provincial share in the divisible pool.

“In recognition of the extraordinary burden borne by the province during the war on terror, an additional one per cent of the undivided divisible pool was allocated exclusively to KP,” it said.

It further added that although the 7th NFC Award was originally envisaged for a five-year period, the absence of consensus on subsequent NFC Awards (8th, 9th, and 10th) necessitated the continued implementation of the 7th NFC Award framework.

“Accordingly, KP continues to receive its due share, including the additional allocation for the war on terror,” the ministry said.

“The federal government releases provincial NFC shares on a fortnightly basis, and no outstanding liabilities exist in this regard,” it said.

It highlighted that Rs46.44 billion had been released to the KP government on December 17, “underscoring the federal government’s adherence to timely disbursement commitments”.

The ministry also noted that from July 2010 to November 2025, Rs5.867 trillion had been transferred to the province as its share of the divisible pool. During this period, Rs705bn had been provided to the province on account of the war on terror, “reflecting federal recognition of the province’s sacrifices and responsibilities”, it added.

It further said that the Centre had also ensured the uninterrupted flow of straight transfers to KP.

“From July 2010 to November 2025, an amount of Rs482.78bn has been transferred on account of royalties on oil and natural gas, gas development surcharge, excise duty on natural gas, and other related heads,” the ministry said.

It noted that in recognition of the province’s “unique fiscal and administrative challenges”, the Centre had also extended “substantial financial support beyond the NFC framework”.

It said that following the merger of the Federally Administered Tribal Areas (Fata), the Centre had been financing the expenditures of the newly merged districts from its own NFC share; it said Rs704bn had been transferred since 2019 in this regard.

Further, the ministry said that an additional Rs117bn had been provided to the province “over the years” to support internally displaced persons.

“Despite constitutional devolution, the federal government continues to invest in provincial welfare and development,” it asserted. The ministry said that Rs115bn had been allocated to KP over the past 15 years from the federal Public Sector Development Programme (PSDP) for “projects of a provincial nature”.

“Through the Benazir Income Support Programme (BISP), an amount of Rs. 481.433bn has been spent in KP from FY2016 to FY2025 on unconditional and conditional cash transfers, providing critical social protection to vulnerable households,” it said.

The ministry said that the Centre was committed to strengthening the NFC framework through inclusive consultation. It said that during the inaugural meeting of the 11th NFC, held on Dec 4, it was decided to constitute a dedicated sub-group to make recommendations on the merger of former Fata and their share in the divisible pool.

“At the request of the government of KP, the first meeting of this sub-group is scheduled for December 23, 2025, with the finance minister, KP serving as the designated convener, demonstrating a collaborative and transparent approach toward resolving outstanding fiscal matters,” it said.

The Ministry of Finance reiterated that the Centre remained fully committed to “equitable resource distribution, fiscal federalism, and sustained support for KP, ensuring that provincial needs, particularly those arising from security challenges, displacement, and administrative integration, are addressed in a timely and responsible manner”.