Khyber Pakhtunkhwa (KP) has been allocated Rs799.359 billion from the war on terror fund between 2010-11 and September 2026, as official records reveal. These funds have been provided by the federal government to compensate the province for economic, infrastructure, and other losses caused by terrorism, underscoring the persistent threat of militant attacks in the region.
The province receives this federal allocation annually, with other provinces also obtaining funds under a similar framework, as managed by the Finance Department. This arrangement stems from the 7th National Finance Commission (NFC) Award, finalized in December 2009 and implemented from July 2010, which granted KP an additional 1% share from the federal divisible tax pool in recognition of the security burdens and losses linked to terrorism.
Over the years, the amount allocated to KP has grown significantly. In the fiscal year 2024-25, the province received Rs112.296 billion, followed by Rs128.234 billion in 2025-26. For the current fiscal year 2026-27, the war on terror allocation is projected at Rs149.076 billion, of which Rs23.069 billion had been disbursed during the first two and a half months.
However, these funds are not categorized under a distinct head within the province’s Consolidated Fund. Instead, the money is merged with other provincial revenues, complicating efforts to monitor its specific utilization through a dedicated expenditure account.
The KP Finance Department explained that the size of the war on terror allocation is tied to the Federal Board of Revenue’s (FBR) collection targets. The province receives the full allocation only when federal revenue goals are met.
This financial support comes amid ongoing militant violence in KP. A report by the Centre for Research and Security Studies indicated that KP experienced 475 fatalities and 151 violent incidents in the second quarter of 2026, making it the most severely affected region nationwide during that period.
The security environment has remained unstable recently. In September, a militant attack on Kohat Police Lines resulted in 22 deaths, including 16 police officials. Additionally, a suicide bombing at an anti-smuggling checkpoint in Dera Ismail Khan killed 13 people, including women and a child.
Security forces have continued conducting intelligence-driven operations throughout the province. In late September, an operation in North Waziristan eliminated three militants. Other operations have targeted militant strongholds along the Afghan border, military and security sources.
Meanwhile, increased funding for policing in KP has been noted. Finance Adviser Muzzammil Aslam announced that the police operational budget has been raised from Rs15 billion to Rs30.2 billion. He also stated that the sanctioned strength of the provincial police has grown to 139,318 posts.
The additional 1% share granted to KP through the 7th NFC Award reflects the recognition of the province’s exceptional security challenges and economic pressures due to terrorism.
