Differences between the Khyber Pakhtunkhwa government and the federal government appear to be easing, as the province has expressed its willingness to contribute its share toward the federation’s budget target.
According to sources, the provincial government is now leaning towards understanding and reconciliation with the federation rather than pursuing a confrontational approach on financial matters.
The recent engagements between Khyber Pakhtunkhwa Governor Faisal Karim Kundi and Chief Minister Muhammad Sohail Afridi have reportedly started yielding positive results.
Officials say the growing dialogue between provincial and federal stakeholders has helped create an environment conducive to cooperation ahead of key budget decisions.
Federation’s funding requirement
According to Finance Department sources, a meeting of elders was held late Tuesday night at the Civil Secretariat in Peshawar to discuss matters related to the National Economic Council (NEC).
Also Read: Punjab budget set at Rs5.13tr for FY2026-27
During the meeting, participants reviewed the federation’s requirement of Rs1,200 billion to meet its budget targets and discussed the role of provinces in supporting the federal government.
KP ready to contribute Rs180bn
Sources said it was decided during the discussions that if other provinces provide their shares to the federation, Khyber Pakhtunkhwa would also be prepared to contribute its portion.
The province is reportedly ready to provide Rs180 billion as its share of the more than Rs1,200 billion expected from the provinces collectively.
Also Read: Federal-provincial resource-sharing dispute delays budget
The final decision regarding the provinces’ contribution to the federation will be taken during the National Economic Council meeting scheduled for today.
According to Finance Department sources, Khyber Pakhtunkhwa Finance Adviser Muzammil Aslam will represent the province and present its official position at the NEC meeting.
Recent federal-provincial talks
The latest developments come days after a meeting between Chief Minister Sohail Afridi and Federal Minister for Planning Ahsan Iqbal.
The meeting, attended by senior officials, focused on issues related to the National Economic Council meeting, the province’s financial rights and matters concerning a meeting with the founding chairman.
Observers believe the recent dialogue between provincial and federal leaders has helped reduce tensions and could pave the way for greater coordination on fiscal and development issues.
Also Read: Govt misses development project completion target
Just a day ago, Punjab had expressed its readiness to offer a financial concession of Rs570 billion to the federal government, a move that could help the Centre reduce its fiscal deficit and meet International Monetary Fund (IMF) targets.
Sources said Punjab is expected to receive Rs3.793 trillion from the divisible pool under the National Finance Commission (NFC) Award. In addition to federal transfers, the province is targeting revenue income of Rs1.33 trillion from its own provincial sources.
The projected inflows form the foundation of the province’s largest-ever budget framework.
.jpg)
