The federal government has allocated Rs8,205 billion for distribution among the provinces under the National Finance Commission (NFC) Award for the new fiscal year, with Punjab and Sindh emerging as the biggest beneficiaries, budget documents revealed.

According to official figures, Punjab is set to receive Rs4,760 billion from the divisible pool, maintaining its position as the largest recipient due to its population share. Sindh will be allocated Rs2,430 billion under the NFC Award.

Khyber Pakhtunkhwa has been earmarked Rs1,342 billion, which includes an additional one percent share for its role in the war on terror. Meanwhile, Balochistan is expected to receive over Rs743 billion from the federal divisible pool.

In addition to the NFC allocations, the provinces will also be given more than Rs217 billion in oil and gas royalties, enhancing their fiscal space for development and governance.

The new fiscal allocations mark a significant increase of Rs1,208 billion in the provinces' share compared to the outgoing year. Punjab will receive an additional Rs641 billion, Sindh Rs291 billion, KP Rs207 billion, and Balochistan Rs70 billion more than last year.

The funds to be distributed among the provinces are derived from various sources including income tax, capital value tax, and sales tax. Moreover, revenues generated from the federal excise duty (FED) and customs duties will also contribute to the total divisible pool.

The increased share is expected to boost the provinces’ ability to fund key social sector projects, especially in health, education, and infrastructure, at a time when inflation and fiscal pressures continue to mount.