The four provinces will receive Rs8,848 billion from the federal distributable revenue in Budget 2026-27, with Punjab set to get the largest share, according to budget documents.
The provincial share will be Rs1,257 billion higher than the amount allocated during the current fiscal year.
According to the budget document, Punjab will receive the highest share of Rs4,402 billion from the federal distributable revenue. Sindh will receive Rs2,207 billion, while Khyber Pakhtunkhwa will get Rs1,443 billion.
Balochistan’s share has been estimated at Rs795 billion in the new budget.
Provinces to get additional transfers
Apart from their share in the distributable revenue, the provinces will also receive Rs213 billion in the form of gas development surcharge and other transfers.
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These transfers are part of the broader resource-sharing arrangement between the federation and the provinces.
New financial formula agreed
The federal government and the four provinces have also agreed on an important financial formula for national financial requirements.
Under the arrangement, the provinces will provide a total grant of Rs1,914 billion to the federal government during the next fiscal year.
The agreement has been reached without affecting the constitutional rights of the provinces.
According to the Budget 2026-27 document, the distribution of resources between the federation and provinces for national needs will be based on revenue of Rs13,350 billion.
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The government estimates that Rs15,264 billion will be collected as tax revenue during the new fiscal year. The additional amount will be available to the federal government in the form of provincial grants.
The financial arrangement will be effective for fiscal year 2026-27. According to the document, the same agreement will be renewed on the same basis for fiscal years 2027-28 and 2028-29.
NFC Award share to remain unchanged
The budget document states that the provinces’ share in federal distributable revenue will remain according to the Seventh National Finance Commission Award.
Under this arrangement, the provinces’ share in federal revenue for the next fiscal year will remain Rs8,848 billion.
