The petition filed by the Khyber Pakhtunkhwa government before the Federal Constitutional Court, seeking Rs964 billion as its claimed share of tax revenues since the merger of Fata in 2018, may carry political undertones. Yet it raises fundamental constitutional and fiscal questions about Pakistan’s federal structure, the functioning of the National Finance Commission, and the equitable distribution of resources among provinces.

At the heart of the matter lies the question of whether constitutional and fiscal arrangements can remain frozen indefinitely despite major demographic and administrative changes. The merger of Fata into KP significantly increased the province’s responsibilities, but its share from the federal tax pool has remained unchanged. This situation raises important questions about fiscal rights and the centre’s obligations under Article 160 of the Constitution. Can an NFC Award based on circumstances more than 15 years old continue unchanged? Does a constitutional change such as the Fata merger automatically alter provincial entitlements, or must the NFC be formally amended before a revised share can be claimed? Is the president’s power to modify an NFC order discretionary, or does it become a constitutional duty when provincial demographics and territorial composition shift? These questions strike at the very core of fiscal federalism.

The timing of KP’s petition makes these issues even more pressing. Current budgetary arrangements have effectively locked provincial shares at last year’s level for the next three years to finance critical federal expenditures. This raises broader concerns about provincial autonomy. If provinces are constitutionally entitled to a defined share of the divisible pool, can fiscal arrangements negotiated under IMF conditions constrain that autonomy? Such questions are particularly significant amid indications that some quarters may wish to revisit or dilute aspects of the 18th Amendment. The NFC and the 18th Amendment are closely linked to the functioning of Pakistan’s federal system, and any attempt to recentralise authority must be examined in light of the constitutional balance between centre and provinces.

While KP’s concerns are legitimate, the choice of moving the court to resolve what is essentially a political issue may not be the most constructive path. The fiscal implications of the Fata merger should first have been taken to the Council of Common Interests. If the NFC process has stalled, the CCI remains the appropriate forum for cooperative federalism. Courts can interpret the Constitution, but they cannot substitute for political negotiation and consensus.

The centre must therefore convene the CCI to allow all stakeholders to discuss the issues raised by KP’s petition. A cooperative approach is essential to address the province’s demands without undermining the constitutional framework. Denying the fiscal realities created by the Fata merger will only deepen discontent. Pakistan’s federal system must evolve to reflect demographic and administrative changes, while ensuring that constitutional principles and provincial rights remain protected.