Exaggerated figures: KP to face over Rs500bn shortfall in federal receipts

PESHAWAR: The budget figures of receipts presented by the Khyber Pakhtunkhwa (KP) government appear to be exaggerated, revealing a consistent gap of over Rs500 billion between projected and actual transfers from the federal government.

These receipts include KP’s share in federal taxes, net hydel profit (NHP), and grants for the merged tribal districts. Despite repeated promises, Islamabad has fallen short of delivering the committed funds, which has undermined KP’s financial planning and delayed development.

The year-wise data shows a growing trend of shortfalls in federal transfers.

The official documents revealed that in 2021–22, the province was allocated Rs1,118 billion but received only Rs1,028 billion — a shortfall of Rs90 billion. In 2022–23, KP was promised Rs1,332 billion but received Rs1,185 billion, resulting in a Rs147 billion shortfall.

Similarly, in 2023–24, out of an allocated Rs1,457 billion, the province received only Rs1,129 billion — a Rs328 billion gap. In the ongoing 2024–25 fiscal year, KP has so far received Rs1,273 billion against an allocation of Rs1,754 billion, resulting in a shortfall of Rs481 billion.

For 2025–26, the government has projected a federal transfer of Rs21802 billion, but officials doubt whether the actual receipts will match the projection, given past performance.

In addition to federal transfers, KP expects to generate Rs129 billion from provincial revenues, including taxes and fees. It also plans to secure Rs177.2 billion through foreign assistance, comprising Rs165.5 billion in loans and Rs11.6 billion in grants. The combined total receipts projected for 2025–26 from all three major sources — federal (Rs1802 billion), provincial (Rs129 billion), and foreign assistance (Rs177.2 billion) — amount to Rs2119 billion.

Officials warn that overreliance on federal transfers, without ensuring actual disbursement, continues to hurt KP’s development agenda. Delays in promised funds have already impacted key services and development schemes, especially in the merged tribal districts.

KP Chief Minister Ali Amin Gandapur has repeatedly called on the federal government to ensure timely, transparent, and complete payment of all constitutionally mandated transfers.