Provinces have given the federal government grants worth Rs57.46 billion for the first time in Pakistan’s history, according to official documents reported on Sunday from Islamabad.
The grants were extended during the first quarter of the current fiscal year under Article 164 of the Constitution, the documents show. Sources described the arrangement as unusual, since provinces are now paying the Centre rather than receiving federal financial assistance.
Provincial grant commitments under the budget deal
Under the current fiscal year’s budget agreement, provinces committed to a combined grant of Rs1.035 trillion to the federal government, sources said. Expected contributions are:
- Punjab: Rs555.7 billion
- Sindh: Rs263.7 billion
- Khyber Pakhtunkhwa: Rs157 billion
- Balochistan: Rs58.6 billion
How the Article 164 grants are calculated and classified
Sources said the grants are calculated from extra revenue the Federal Board of Revenue collected beyond its previous-year total. The amount has been included in the federal budget as non-tax revenue.
Sources also clarified that these grants are separate from the National Finance Commission Award and are voluntary. Article 164 allows federal and provincial governments to grant funds to one another for any purpose, including projects of national importance, sources said.
