In a major development for inter-provincial fiscal management, the federal government has allocated Rs8,205 billion under the National Finance Commission (NFC) Award for distribution among the provinces for the upcoming fiscal year. The lion’s share once again goes to Punjab and Sindh, with the budget documents confirming a substantial increase in overall provincial shares.
Punjab is set to receive Rs4,760 billion, maintaining its top position due to its large population. Sindh follows with Rs2,430 billion, while Khyber Pakhtunkhwa (KP) is allocated Rs1,342 billion, which includes an additional 1% for its efforts in the war on terror. Balochistan, the least populous but strategically vital province, will get over Rs743 billion from the divisible pool.
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The provinces will also benefit from over Rs217 billion in oil and gas royalties, further bolstering their development budgets. The cumulative increase in NFC allocations from the previous fiscal year amounts to Rs1,208 billion, with Punjab gaining Rs641 billion more than last year.
These enhanced distributions, drawn from federal income tax, sales tax, FED, customs duties, and capital value tax, are expected to empower provincial governments to address pressing socio-economic challenges, particularly in health, education, and infrastructure.
