Peshawar: The Khyber Pakhtunkhwa government requested a special financial assistance package of Rs 18 billion from the federal government for public sector universities struggling with accumulated deficits, outstanding liabilities and rising operational costs.
In a formal request, the provincial government warned that persistent financial shortages were threatening the sustainability of higher education institutions and affecting their administrative efficiency, academic performance, and ability to meet statutory responsibilities.
The proposed package, intended for the 2026 to 2027 fiscal year, includes financial support to address existing liabilities, improve university infrastructure, and establish endowment funds to provide long term income.
The provincial government requested that the assistance be delivered either through an enhanced allocation to the Higher Education Commission (HEC) or through a dedicated federal grant.
How the Rs 18 billion package would be distributed
According to the proposal, Rs 6 billion was requested as a one time grant to address accumulated deficits and outstanding liabilities of public universities.
A further Rs 6 billion has been proposed for development programs, including information technology, human resource development, training, and infrastructure.
The remaining Rs 6 billion would serve as seed funding for university endowment funds, which are intended to generate permanent income and reduce dependence on annual government allocations.
The request also calls for dedicated assistance for newly established universities, particularly those in remote and underdeveloped districts, where limited financial resources undermine institutional sustainability.
Rising costs put pressure on university budgets
The provincial government identified inadequate recurring grants as a major factor in the financial difficulties universities face.
It said that rising electricity and gas bills, laboratory expenses, campus security requirements, and employee related liabilities were placing additional pressure on already constrained budgets.
The rising cost of salaries and pensions was also identified as a significant challenge, with universities struggling to meet recurring financial obligations.
According to the report, many institutions became increasingly dependent on student fees to cover operational expenses, while further fee increases are becoming difficult.
The government warned that limited resources were also constraining research, innovation, faculty development, and the modernization of educational facilities.
Laboratories, libraries, hostels, and digital infrastructure require additional investment to meet academic and accreditation standards.
Government seeks long term financial sustainability
The request emphasized that public universities require financial assistance not only to address immediate deficits but also to maintain institutional autonomy and academic standards.
It proposed a dedicated federal mechanism to share the burden of increasing salaries, pensions and other employee related liabilities.
The provincial government also highlighted the need for funding to implement HEC quality assurance frameworks, accreditation requirements and governance reforms.
It said universities were facing additional expenditure on student welfare, counselling, health facilities, anti drug initiatives and campus security.
The government urged the Federal Government to treat the request as a priority, arguing that the financial stability of universities was essential for protecting students’ academic futures, safeguarding employees and maintaining access to quality higher education.
The Rs18 billion package remains a proposal submitted for federal consideration. No approval or release of funds was confirmed in the material provided.
