RECORDER REPORT

KARACHI: Spokesperson for the Government of Sindh Sukhdev Hemnani has said that federal revenue shortfalls are directly affecting provincial development programmes and public-service commitments, as meeting a subsequently revised revenue target does not compensate provinces for the funds they had anticipated when preparing their budgets.

He said that 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 that the stronger the provinces, the stronger the federation, as empowered provinces are better positioned to deliver essential public services, respond effectively to emergencies, and meet the country’s national need.

“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 recognise that the provinces collectively receive 57.5 percent of the relevant divisible pool under the NFC Award, not 57.5 percent of the federal government’s total revenue. Sindh receives 24.55 per cent of the ordinary provincial pool, amounting to approximately 14 percent of the overall net divisible pool before separate grants and straight transfers, Hemnani mentioned.

He further said that these 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. This distinction should be recognised when assessing the financial relationship between the federal government and the provinces he said.

Hemnani said provincial budgets are prepared against federal revenue projections, while actual divisible-pool transfers depend on collections. For FY26, the original FBR target was Rs14.131 trillion, whereas reported year-end net collection stood at approximately Rs13 trillion, with a gap of Rs1.13 trillion. Consequently, Sindh’s federal tax share and straight transfers were revised from approximately Rs2.044 trillion to Rs1.879 trillion, reducing budget estimates by nearly Rs165 billion.

“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 these pressures, Hemnani said Sindh committed approximately Rs260 billion from its own share under Article 164 for national strategic requirements in FY2026–27, while its overall development portfolio was reduced from approximately Rs1.018 trillion to Rs720 billion.

Hemnani said debates about Pakistan’s federal structure should strengthen constitutional federalism and national cohesion rather than create mistrust between the Centre 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 Centre and provinces ultimately weaken the federation itself,” he concluded.