ISLAMABAD: The federal government has earmarked Rs8,205 billion for distribution among Pakistan’s provinces under the National Finance Commission (NFC) Award for the upcoming fiscal year, with Punjab and Sindh receiving the largest shares, according to newly released budget documents.
Punjab remains the top recipient, set to receive Rs4,760 billion from the divisible pool — a reflection of its population size. Sindh will get Rs2,430 billion, also maintaining a strong share based on demographic and revenue considerations.
Khyber Pakhtunkhwa (KP) has been allocated Rs1,342 billion, which includes an additional 1% share in recognition of its frontline role in the war on terror. Balochistan is slated to receive over Rs743 billion from the federal pool.
Beyond these allocations, the provinces will also receive over Rs217 billion in oil and gas royalties, providing additional fiscal flexibility to support development and governance initiatives.
Compared to last year, the new allocations represent a notable increase of Rs1,208 billion in total provincial shares. Punjab’s allocation rises by Rs641 billion, Sindh’s by Rs291 billion, KP’s by Rs207 billion, and Balochistan’s by Rs70 billion.
The NFC distributions are sourced from a range of federal revenues, including income tax, capital value tax, sales tax, federal excise duty (FED), and customs duties.
This expanded provincial funding is expected to strengthen local capacity to finance essential public services, particularly in health, education, and infrastructure. It comes at a time when provinces face growing inflationary pressures and rising fiscal demands.
