The Khyber Pakhtunkhwa government has expressed concerns over the federal government’s decision to reduce the development budget, particularly the inclusion of Rs6.5 billion allocated for the merged tribal districts in the overall Rs100 billion cut.

In a statement posted on X, Muzammil Aslam, adviser to the KP chief minister on finance, said the provincial government had been informed by the federal authorities about the reduction and would formally request a review of the decision.

He said that out of the Rs65 billion allocated for the merged districts of the former Federally Administered Tribal Areas (Fata), only Rs16 billion had been released during the first nine months of the current fiscal year. He warned that further cuts to development allocations for the region could increase uncertainty at a time when the area continues to face security challenges.

While acknowledging that the country’s fiscal situation had tightened due to the ongoing regional conflict, Mr Aslam said development spending should not have been reduced, particularly as such allocations were already at historically low levels. He suggested that if cuts were unavoidable, the federal government could instead have reduced discretionary development funds allocated to lawmakers.

The adviser also said the federal government could have sought cooperation from larger provinces before reducing funds earmarked for the merged districts, adding that the security situation in the region warranted increased spending rather than cuts.

He noted that the KP government had already undertaken Rs31 billion in bridge financing during the current fiscal year due to delays in the release of federal funds, and stressed that the province remained the only one currently spending its own resources to support development in the merged districts.