Centre deducts Rs35 billion from provinces under first-of-its-kind revenue arrangement

Profit by Pakistan Today reported that the federal government received Rs34.839 billion from the four provinces in the opening two months of FY2027. The money was booked as non-tax income under Article 164, against a federal annual collection goal of Rs1.035 trillion.

The provinces agreed before the FY2027 budget to provide grants from their NFC allocations, supporting federal obligations linked to Pakistan's $7 billion IMF programme. The Centre plans to use the funds for water schemes, including Diamer-Bhasha, Dasu and Karachi's K-IV project; the ECC approved a Rs275 billion supplementary grant for water projects on November 4. Further provincial payments will depend on FBR receipts and the agreed formula, while Finance Minister Muhammad Aurangzeb has said the arrangement could continue over the medium term without specifying a timeframe.