A widening gap

Naseer Memon
June 14, 2026

The issue of division of resources among the federal and provincial governments should be resolved through dialogue

A widening gap


T

he 18th Constitutional Amendment is once again in the spotlight.

It has been claimed on the one hand that the provinces have failed to transfer benefits of more resources and autonomy to their masses and the federal government should therefore take charge. Many of the proponents of this view have apparently not read the 18th Amendment. The amendment is misconstrued as a change in a single article of the constitution that could be undone through routine voting in the parliament. In fact, the 18th Constitutional Amendment actually amended 102 out of the 280 articles of the constitution through a rigorous process in which all parliamentary parties debated the merits before finalising a consensus draft after several months of nail-biting negotiations.

Also, if constitutional amendments are to be revoked based on the performance of some provincial governments, then the federal government should also be held accountable for its performance. On several counts, the federal governments appear to have been as much of a failure as the provincial ones. Consider:

The federal government abolished the sales tax on petroleum and imposed a petroleum development levy instead. The revenue target under this head was set at Rs 1,468 billion this year. The government raised the levy so aggressively that Rs 1,200 billion was collected in first three quarters of the financial year. Given the increased petroleum levy rates and escalating oil prices following the Gulf War, the federal government is expected to surpass the target and collect Rs 1,600-1,800 billion. Had this amount been collected as sales tax, the provinces would have received a 57.5 percent share under the NFC award.

A Ministry of Finance report has revealed that during the last fiscal year, federal public sector corporations heaped a staggering loss of Rs 832 billion on the national exchequer. In addition to that, the federal government injected financial assistance worth Rs 2,078 billion to federal government corporations through equity, loans, grants and subsidies.

In a recent meeting of the Public Accounts Committee, it was revealed that the country has suffered a Rs 43 billion loss because the Neelum-Jhelum hydro-power project has been dysfunctional for two years. The project was completed at a cost of over Rs 500 billion. However, shortly after completion, one of its tunnels crumbled. It was repaired and restarted, only to collapse again within six months.

If the federal government is facing a financial squeeze, it should cut its wasteful expenditure. It can save over Rs 300 billion annually by abolishing the 17 departments that were supposed to be devolved to the provinces after the 18th Amendment.

Recently, the Planning Commission raised serious concerns over project management, transparency and capability over delays by the WAPDA in the Diamer-Bhasha Dam and Tarbela Dam (5th Extension) projects. The cost of the Tarbela extension project has risen from Rs 82 billion to Rs 316 billion rupees, a 282 percent overrun.

These are just a few examples from the water sector alone. Similar stories are told in every sector. Judging strictly by the yardstick of performance, the federal governments have been no better than the provincial governments.

The autonomy and the NFC share extended to the provinces are their constitutional rights. These were made possible through half a century of tireless effort by democratic forces.

If the federal government is facing a financial squeeze, it should cut its wasteful expenditure. It can save over Rs 300 billion annually by abolishing the 17 departments that were supposed to be devolved to the provinces after the 18th Amendment.

Another proposition is to ask the provincial governments to contribute in national debt servicing. This will open another can of worms. Pakistan is struggling with an ever-rising debt burden. By September 2025, the debt had crossed Rs 80 trillion. Roughly a third of this is external debt. If federal government attempts to transfer debt servicing to the provinces, they will be justified to demand audit of spending of these loans. The federal governments have never consulted provinces before acquiring foreign loans. Too often, the terms of the foreign debt are kept under a tight lid. It will be revealing to know where the billions of dollars were spent.

Any attempt to reverse 18th Amendment or cut the provinces’ share in the NFC will only weaken a fragile relationship between the Federation and the provinces. There is a huge gap in service delivery all over the country. For decades, both federal and provincial governments have been pursuing misplaced priorities. A testimony to this fact is the global human development index where Pakistan ranks consistently low. Both federal and provincial governments have failed to uplift vital human development indicators. A serious introspection and course correction is an undisputed exigency.


The writer is a civil society professional, [email protected] 

A widening gap