Khyber Pakhtunkhwa Spends Over Rs 60.5 Billion from Settled Districts’ Funds on Tribal Areas Due to Federal Shortfall

Despite repeated requests, the lack of federal funds worsens governance challenges in these areas.

Due to a shortfall in federal funding, the Khyber Pakhtunkhwa (KP) government has spent more than Rs 60.5 billion from settled districts’ funds on the tribal districts over the past three years. Of this amount, Rs 40.6 billion was allocated for current expenditures, while Rs 19.9 billion was spent on development projects.

KP's Finance Advisor Muzzammil Aslam, in a letter to Federal Finance Minister Senator Aurangzeb, highlighted that the provincial government is facing severe financial difficulties in providing essential and basic facilities to the people of tribal districts, which have a population exceeding 6.4 million. Despite repeated requests, the lack of federal funds worsens governance challenges in these areas.

According to Muzzammil Aslam, besides federal allocations, the KP government has spent Rs 40.6 billion from its resources in tribal districts:

• Rs 2.03 billion in FY 2021-22,
• Rs 13.1 billion in FY 2022-23,
• Rs 22.1 billion in FY 2023-24, and
• Rs 10.4 billion so far in the current fiscal year.

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Additionally, under the Accelerated Development Program (ADP), the provincial government has spent an extra Rs 19.9 billion, including:

• Rs 11 billion in FY 2021-22,
• Rs 8.5 billion in FY 2023-24, and
• Rs 2.9 billion in the current fiscal year.

The letter further stated that the lack of funds is affecting service delivery and potentially reversing the socioeconomic gains achieved after the merger of tribal districts. The KP government has urged the federal finance minister to ensure the timely release of funds to prevent a financial crisis and sustain the development process in the region.