National agreement
National agreement: Soon after the 27th Amendment passed, talk of the 28th Amendment began. If approved, it could remove constitutional protection for provincial shares under the seventh NFC award. Many political parties and international lenders say Islamabad needs a bigger share of federal resources. However, changing provincial allocations through political bargaining is not simple. In fact, it could weaken Pakistan’s federal system, reduce provincial autonomy, and hurt human development.
Amendment Arguments
Supporters of the amendment give three main reasons. First, they say the seventh NFC award gave too much money to provinces without giving them matching responsibilities. Second, they argue that easy access to federal funds reduces provinces’ incentive to collect their own taxes. Third, they accuse provinces of wasting money on salaries and politically motivated projects. These projects do not improve public services. Nevertheless, some concerns are partly true.
For example, in Balochistan, development budgets follow political decisions rather than real needs. Spending has become inefficient. Members of the provincial assembly sometimes use funds for corruption or narrow political gain instead of public services. Similarly, other provinces show problems, though to a lesser extent.
Revenue Problems
Moreover, Pakistan’s fiscal problems began before the seventh NFC award. Reducing provincial shares alone will not fix them. Low productivity, a weak tax system, and poor capacity to collect revenue are deeper problems. Both federal and provincial governments have failed to expand taxes. Tax-to-GDP ratios have fallen in recent years.
Social Spending
At the same time, Pakistan cannot cut social spending further. The country already lags behind its neighbors in education, health, and social protection. Reducing provincial funds will limit their ability to improve schools, hospitals, and social services. In addition, when the centre receives more money, it often spends on defence or elite subsidies instead of social needs. Smaller provinces like Balochistan and Khyber Pakhtunkhwa already spend much of their budgets on security. In Balochistan, spending on law and order now exceeds spending on health and education. Cutting funds further would hurt human development even more.
Performance Incentives
A better approach, therefore, is to reward performance. The government could link part of fiscal transfers to improvements in social services and revenue collection. Provinces that increase taxes and improve results could receive more resources. At the same time, inefficient provincial spending does not mean the center will spend better. Islamabad also faces criticism for politically driven projects and weak fiscal discipline. Centralizing funds would repeat the same problems and reduce provincial control over services.
Federal Restraint
Finally, the federal government should step back from areas already given to provinces. Spending federal funds on provincial projects adds pressure and weakens provincial autonomy. Parliament must consider the consequences of reducing provincial shares. The seventh NFC award and the 18th Amendment strengthened Pakistan’s federal system. Therefore, changing them now through political engineering could damage trust between the centre and provinces. A better approach is to reform taxes, enforce spending discipline, and link resource allocation to results.
Published in Dawn, 3rd December 2025
