ISLAMABAD: Uncertainty continues to surround the announcement of Pakistan’s federal budget for 2026-27 as the federal government and provincial administrations remain divided over a proposed transfer of more than Rs1 trillion to meet strategic national requirements.
The National Economic Council (NEC) meeting, initially scheduled for June 8, was postponed for the third time at the last moment. Ongoing negotiations over provincial shares under the National Finance Commission (NFC) award remain unresolved. Consequently, the federal budget may not be presented in parliament on June 10 as previously announced.
Khyber Pakhtunkhwa Finance Adviser Muzzammil Aslam confirmed that the Centre had asked provinces to forgo any increase in their NFC allocations next year. Under the proposal, provinces would return any funds received above their current year’s share to the federal government.
However, provincial governments strongly opposed the proposal. They argued that the move would push their budgets into deficit and create serious administrative challenges. According to Aslam, federal officials suggested provinces could manage the situation by freezing salaries and restricting development spending.
The Centre’s request comes in addition to the Rs1.95 trillion cash surplus already committed by provinces under an IMF-backed fiscal framework.
Following discussions with a federal delegation led by Planning Minister Ahsan Iqbal, Aslam described the situation as unprecedented. He said major disagreements remained unresolved and warned that even the rescheduled NEC meeting faced uncertainty.
Furthermore, Aslam noted that implementing the proposal could conflict with IMF commitments. He added that the issue had evolved from a technical matter into a political challenge requiring broader consultations.
Meanwhile, Chief Minister Sohail Afridi reiterated concerns over what he described as unequal treatment of Khyber Pakhtunkhwa in fiscal allocations and development funding. He highlighted reductions in funding for merged districts, delays in NFC transfers, and persistent energy shortages despite the province’s significant natural gas production.
Afridi also stressed the need to consult former prime minister Imran Khan on key budgetary matters. He argued that major economic decisions required guidance from party leadership before any consensus could be reached.
As negotiations continue, uncertainty over the federal budget timetable remains unresolved.
