• Warns funding gap could derail IMF-linked Rs157bn budget surplus for FY26, provision of essential services in merged districts
• Transfers under divisible pool stand short by Rs76bn in first half of 2025-26

ISLAMABAD: At a time when the federal government is grappling with its own fiscal shortfall, the Khyber Pakhtunkhwa government has raised concerns that revenue transfer shortfalls from the centre during the first half of 2025-26 have jeopardised the province’s ability to meet its annual budget surplus target, as agreed with the International Monetary Fund (IMF).

The provincial government further warned that the delayed and reduced federal transfers are exerting significant pressure on its finances, particularly impa­cting the delivery of essential services in the merged districts of the former Federally Admini­stered Tribal Areas (Fata).

The issue was formally raised in a two-page letter from Khyber Pakhtunkhwa’s Adviser on Finance to the Chief Minister, Muzammil Aslam, to Federal Finance Minister Muhammad Aurangzeb. The letter followed weeks after newly appointed Chief Minister Sohail Afridi publicly accused the federal........

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