Pakistan’s federal government has made history in the 2026-27 budget. For the first time, it expects to receive Rs. 1.035 trillion as grants from the provinces. This amount is included under non-tax revenue receipts and will help support national expenditures and maintain fiscal stability.
Finance Minister Muhammad Aurangzeb presented the Rs. 18.77 trillion budget on June 12, 2026. Under the National Finance Commission (NFC) Award, provinces get a share of federal revenues, around Rs. 8.848 trillion. Now, provinces have agreed to give back a large portion (between Rs. 13,350 billion to Rs. 15,264 billion pool) as grants to the federal government under Article 164 of the Constitution. This is for strategic national needs, especially security.
To make this possible, provinces have adjusted their development spending. Some allocations were reduced so they could contribute more to the centre. The move comes after talks between the federal and provincial governments to pool resources for pressing issues like defence.
This new arrangement marks a big shift in federal-provincial financial relations. Supporters say it will strengthen national unity and help meet important goals. However, critics worry it may slow down development work in provinces and affect local projects in education, health, and infrastructure.
