THE KP budget does not read like a document of a province getting its fiscal house in order. Revenue is projected at Rs2.12tr against spending estimates of Rs2.17tr, leaving a hole of Rs50bn. Chief Minister Sohail Afridi, who presented the budget before the provincial assembly on Friday, pledged that the province would not borrow to plug this gap and promised to fill it from KP’s own resources. That sounded like a chief executive who believes in fiscal discipline and stability. However, headline numbers suggest inflated estimates for the next fiscal year — perhaps for political reasons. Close to three-quarters of provincial receipts, or nearly Rs1.59tr, comprise federal transfers, with the province itself raising only Rs182.4bn. The comparison is not meant to downplay the government’s efforts to manage a province facing precarious security conditions; rather, it is a reality that all provinces face.

KP’s ‘no borrowing’ pledge is a bet that Islamabad will keep the promised transfers flowing in a timely manner. That claim matters because the centre has frozen each province’s share in the divisible pool at the current year’s level for the next three years under the NFC arrangement; anything collected above that has to be returned to the centre as a grant. Mr Afridi has linked KP’s cooperation on the NFC freeze to granting access to his jailed leader Imran Khan. He said that KP would not sign any draft until his conditions are met. But the question is: for how long can he hold out against the centre? The chief minister’s defiance might help him win concessions for his incarcerated leader. Or it might not work, with the province ultimately having to agree to the federal demands. After all, it is the centre that controls the provinces’ purse strings. The CM may have the right to use whatever leverage he has to pressure the centre into accommodating his demand. But that should not come at the expense of sound budgeting.

Published in Dawn, June 21st, 2026