Nathia Gali, August 25, 2025 — Khyber Pakhtunkhwa (KP) is calling for a major revision to the National Finance Commission (NFC) Award formula, arguing that the current resource distribution model unfairly favors population size while ignoring key provincial contributions like forestation and energy production.
Speaking at the Prosper Pakistan conference, KP Chief Minister’s Advisor on Finance, Muzzammil Aslam, criticized the horizontal distribution formula, which allocates 82% of resources based on population and only 10.6% on backwardness. He proposed treating both factors as disincentives, urging inclusion of prosperity and environmental stewardship in future calculations.
Aslam also highlighted federal development imbalances, accusing the National Highway Authority of favoring Punjab and Sindh while neglecting KP and Balochistan. He noted that KP holds 45% of Pakistan’s forest cover, yet federal reporting underrepresents this figure. The province has increased forestry allocations and offered compensation to families affected by recent floods.
On energy, Aslam revealed that KP is developing 12 hydropower projects with a combined capacity of 1,000MW, producing electricity at just 8 cents per unit. However, he alleged that federal wheeling charges—raised to Rs. 27 per unit—are obstructing cheaper provincial power from reaching consumers.
Water distribution also came under scrutiny, with Aslam citing delays in agreed projects like the Left Bank Canal, despite IRSA’s allocation of 110MAF among provinces.
Quoting Federal Minister Ahsan Iqbal, Aslam warned of a looming economic collapse within five years due to an empty treasury and shrinking development budgets.
The conference also featured Tajikistan’s Ambassador, who announced the CASA-1000 power project will be completed by 2026, with 250–400 trucks crossing borders daily. He called for stronger banking cooperation and noted discrepancies in cotton trade reporting.
Business leader Anjum Nisar added to the critique, blaming successive governments for economic mismanagement. He revealed that State-Owned Enterprises (SOEs) are losing Rs. 850 billion annually, while flawed Free Trade Agreements and IPPs have worsened the crisis. He also flagged $12 billion in capital flight and a 61% effective tax rate on the corporate sector.