The federal government has allocated Rs8,205 billion for distribution among provinces under the National Finance Commission (NFC) Award for the upcoming fiscal year, with Punjab and Sindh receiving the largest shares. This represents a significant increase of Rs1,208 billion compared to the previous year’s allocations.
According to official budget documents, Punjab will receive Rs4,760 billion from the divisible pool, maintaining its status as the top recipient due to its population size. Sindh follows with an allocation of Rs2,430 billion. Khyber Pakhtunkhwa has been allocated Rs1,342 billion, which includes an extra one percent share in recognition of its contribution to the war on terror. Balochistan is set to receive over Rs743 billion.
Additionally, provinces will receive over Rs217 billion in oil and gas royalties, further enhancing their fiscal capacity. Punjab’s share has increased by Rs641 billion, Sindh’s by Rs291 billion, KP’s by Rs207 billion, and Balochistan’s by Rs70 billion compared to the previous fiscal year.
These funds are sourced from income tax, sales tax, capital value tax, federal excise duty, and customs duty revenues collected by the federal government. The increased provincial allocations are expected to support key development initiatives in the health, education, and infrastructure sectors amid rising inflation and economic challenges.
