Khyber-Pakhtunkhwa Chief Minister Sohail Afridi expressed deep concern to Prime Minister Shehbaz Sharif over the federal government’s persistent failure to release constitutionally guaranteed federal funds, warning that the province faced an acute fiscal and governance crisis.

In a letter addressed to the premier, CM Afridi said, “I am compelled to place on record the deep and mounting concern of the Government of Khyber-Pakhtunkhwa regarding the persistent failure to release constitutionally guaranteed federal transfers, a failure that has now translated into an acute fiscal and governance crisis for the province.”

He highlighted that the provincialo budget for the current fiscal year was formulated based on constitutional entitlements, including Net Hydel Profit, Oil and Gas Royalties, post-merger shares in the National Finance Commission (NFC), and routine monthly transfers under the National Finance Commission (NFC).

“These were not discretionary assumptions but binding fiscal obligations,” the chief minister stated.

He noted that actual federal releases had “consistently fallen short” of budgeted levels. CM Afridi underscored that the withholding of routine monthly NFC transfers, was unconstitutional and detrimental to cooperative federalism.

According to the letter, K-P’s NFC entitlement of Rs658.4 billion was met with only Rs604b to date, creating a shortfall of Rs54.4b. The chief minister described this as a “material breach” affecting cash management, budget execution and service delivery across critical sectors.

“The impact is most stark in the merged districts, where development, stabilisation, and state consolidation are acknowledged national priorities. Despite a provincial allocation of Rs292b, federal releases amount to only Rs56b thus far. This severe and continuing gap has undermined the provision of essential public services and development interventions in these historically marginalised areas, eroding the objectives of the merger and weakening national cohesion,” the letter reads.

He also emphasised that the fiscal constraints came while the province was on the frontline against terrorism and continued to shoulder extraordinary expenditures related to flood response and rehabilitation, and the support of temporarily displaced persons – responsibilities that he noted were national in scope but financially borne “disproportionately and unsustainably” by the province.

“In view of the above, the Government of K-P expects immediate corrective action by the Federal Government, including the full and unconditional release of all outstanding federal dues, particularly routine monthly NFC transfers, Net Hydel Profit, Oil and Gas Royalties, and allocations for the merged districts, strictly in accordance with constitutional provisions and agreed fiscal arrangements. Any further delay will only compound the Province’s fisca! stress and weaken governance capacity at a critical juncture,” the letter concluded.