KARACHI: Federal revenue shortfalls are directly affecting provincial development programs and public-service commitments, and meeting a later-revised revenue target does not compensate provinces for funds they had anticipated when preparing their budgets, a Sindh government spokesperson said.
Sukhdev Hemnani, spokesperson for the Government of Sindh, said Pakistan’s strength lies in strong cooperation between the federation and its provinces, equitable resource distribution, protection of constitutional rights and respect for the democratic will of the people.
He said the stronger the provinces, the stronger the federation, because empowered provinces are better positioned to deliver essential public services, respond effectively to emergencies and meet the country’s national needs.
“Sindh has demonstrated this commitment through substantial financial cooperation, even while facing pressures on its own resources,” Hemnani said.
He said discussions on federal finances should recognize that provinces collectively receive 57.5% of the relevant divisible pool under the National Finance Commission Award, not 57.5% of the federal government’s total revenue. Sindh receives 24.55% of the ordinary provincial pool, amounting to about 14% of the overall net divisible pool before separate grants and straight transfers, he said.
Hemnani said those resources help provinces meet their constitutional responsibilities and provide essential public services, while significant federal non-tax revenues remain outside the NFC revenue-sharing arrangement. He said that distinction should be recognized when assessing the financial relationship between the federal government and the provinces.
He said provincial budgets are prepared against federal revenue projections, while actual divisible-pool transfers depend on collections. For fiscal year 2026, the original Federal Board of Revenue target was 14.131 trillion rupees, while reported year-end net collection stood at about 13 trillion rupees, a gap of 1.13 trillion rupees. As a result, Sindh’s federal tax share and straight transfers were revised from about 2.044 trillion rupees to 1.879 trillion rupees, reducing budget estimates by nearly 165 billion rupees.
“Federal collection shortfalls directly affect provincial development and public-service commitments. Meeting a subsequently lowered target does not restore the resources provinces anticipated when their budgets were prepared,” he said.
Despite those pressures, Hemnani said Sindh committed about 260 billion rupees from its own share under Article 164 for national strategic requirements in fiscal year 2026-27, while its overall development portfolio was reduced from about 1.018 trillion rupees to 720 billion rupees.
Hemnani said debates about Pakistan’s federal structure should strengthen constitutional federalism and national cohesion rather than create mistrust between the center and the provinces.
“The federation cannot be strengthened by weakening its provinces. Any measures that curtail provincial autonomy, disregard democratic mandates or erode trust between the center and provinces ultimately weaken the federation itself,” he concluded.
