ISLAMABAD: Pakistan’s provinces have reportedly agreed to assist the federal government in addressing its fiscal deficit, with a mechanism for the transfer of financial resources also having been finalized during high-level consultations.
The development emerged after a joint meeting of the government and the Pakistan Peoples Party (PPP) budget technical committee, where senior political and economic stakeholders discussed fiscal arrangements ahead of the federal budget.
High-Level Meeting Held
According to sources, the meeting was attended by senior PPP leaders Senator Saleem Mandviwalla, Naveed Qamar, and Sherry Rehman.
Deputy Prime Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb, and senior officials of the Federal Board of Revenue (FBR) also participated in the discussions.
The talks focused on ways to strengthen federal finances while maintaining coordination between the center and the provinces.
Agreement on Fiscal Support
Sources familiar with the discussions said the provinces agreed in principle to help the federal government bridge its fiscal shortfall.
A framework for providing the financial support was also reportedly worked out during the meeting, although detailed operational arrangements are expected to be finalized through further consultations.
According to the sources, the federal government had requested approximately Rs1.7 trillion in support from the provinces.
Punjab Ready to Contribute Significant Share
Officials indicated that Punjab had already expressed willingness to provide more than Rs500 billion in assistance to the federal government.
The remaining amount is expected to be contributed collectively by the other provinces under the agreed formula.
The arrangement is being viewed as part of broader efforts to improve fiscal stability and address budgetary pressures facing the federation.
Consensus Reached Among Provinces
Speaking on the matter, Senator Saleem Mandviwalla said that key issues were resolved during a major meeting held at the Presidency.
According to him, all four provinces agreed to provide between Rs1.2 trillion and Rs1.7 trillion to the federal government.
He stated that the funds were required in view of Pakistan’s strategic and national security-related challenges and that there was broad agreement on the need to support the federation.
Debate Focused on Mechanism, Not Principle
Mandviwalla emphasized that there was no conflict between the federal government and the provinces over the issue.
He explained that the primary discussion revolved around the mechanism through which the financial support would be provided rather than whether assistance should be given.
“There was no dispute. The federal government made a request, and most of the discussion centered on the procedure for implementing it,” he said.
Reasons for Budget Delay
The PPP leader also addressed reports regarding delays in the budget process.
According to him, scheduling difficulties caused by the Gilgit-Baltistan elections and the unavailability of key officeholders, including the President and Prime Minister, contributed to delays in consultations and decision-making.
He added that meetings could not be held as planned, slowing progress on several budget-related matters.
However, he noted that discussions regarding the development budget and other major issues have now been completed.
Budget Timeline
The developments come ahead of a busy week for Pakistan’s economic policymakers.
The National Economic Council (NEC) is scheduled to meet today to review key economic and development plans.
Meanwhile, the Federal Budget is expected to be presented on Friday, while the Economic Survey of Pakistan is likely to be released on Thursday, providing an overview of the country’s economic performance during the outgoing fiscal year.
The reported agreement between the federal government and the provinces could play a significant role in shaping the final budget framework and addressing fiscal challenges in the coming year.
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