Khyber Pakhtunkhwa Chief Minister Muhammad Sohail Khan Afridi has written a formal letter to Prime Minister Shehbaz Sharif, warning that delays in the release of constitutionally mandated federal funds are pushing the province into a severe financial crisis.

In the letter, the chief minister said persistent delays in federal transfers were undermining provincial governance and service delivery.

He noted that the KP budget had been framed based on constitutional fiscal entitlements, but actual releases had consistently fallen short of targets, despite the province bearing high national costs as a frontline region in the fight against terrorism.

“These were not discretionary assumptions but binding fiscal obligations,” he emphasised, adding that “contrary to these commitments, actual releases have consistently fallen short of budgeted levels”.

CM Afridi said the situation had been aggravated by the withholding of routine monthly transfers under the National Finance Commission (NFC) Award.

“Of even greater concern is the withholding of routine monthly NFC transfers, a practice that finds no sanction in the Constitution and strikes at the core of cooperative federalism,” he said.

According to the chief minister, KP was entitled to receive Rs658.4 billion from the federal divisible pool but had received only Rs604 billion so far, resulting in a shortfall of Rs54.4 billion.

“This is not an accounting variance; it represents a material breach that has directly impaired cash management, disrupted budget execution, and constrained service delivery across critical sectors of governance,” he asserted.

The chief minister said the impact was most severe in the merged districts, where development and stabilisation were recognised as national priorities. He said the province had allocated Rs292 billion for the merged districts, but federal releases to date stood at only Rs56 billion.

“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,” he said.

CM Afridi also pointed out that the fiscal constraints were unfolding at a time when KP continued to remain on the frontline of counter-terrorism operations, while also bearing extraordinary expenditures linked to flood response and rehabilitation, as well as the care of temporarily displaced persons.

“These are national responsibilities; however, the financial burden continues to be borne disproportionately and unsustainably by the province,” he said.

In view of the situation, the chief minister called for “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 fiscal stress and weaken governance capacity at a critical juncture,” he warned, adding that the gravity of the matter required the prime minister’s “urgent and personal attention”.