Karachi – September 4, 2025: A detailed analysis by the ICMA Research and Publications Department reveals shocking per capita gaps in Pakistan’s provincial budgets for FY2025–26, exposing stark regional disparities and under-prioritized sectors. While larger provinces such as Punjab, Sindh, and Khyber Pakhtunkhwa (KPK) have higher overall budgets, per capita allocations tell a very different story. Despite a population of 128 million, Punjab spends only Rs. 9,711 per person on development, compared to Rs. 18,278 in Sindh and Rs. 13,388 in KPK. Health spending per person is also lower in Punjab at Rs. 4,938, while Sindh and KPK allocate Rs. 6,856 and Rs. 6,769 respectively. These differences are not just numbers—they reflect real inequalities in access to development, health, and education across the country.
Smaller regions such as Azad Jammu & Kashmir (AJK) and Gilgit-Baltistan (GB) show very high per capita allocations—AJK spends Rs. 14,283 per person on education, and GB Rs. 24,784 on development—but these figures largely reflect their smaller populations rather than higher absolute budgets. Across Pakistan, social welfare spending remains extremely low, generally under Rs. 500 per person, with GB at only Rs. 8.9, highlighting the urgent need to prioritize welfare in a country facing widespread poverty.
The ICMA analysis also shows that provincial contributions to IMF fiscal targets remain below expectations. Own-source revenues, especially from agricultural income tax, are under-collected, and the combined provincial cash surplus of Rs. 1,082 billion falls short of the Rs. 1,500 billion target, raising concerns over the consolidated fiscal deficit. Agriculture receives notable attention in Sindh and Punjab, while IT development remains modest across most provinces, with Balochistan standing out with Rs. 12.6 billion allocated for digital initiatives.
Despite controlled current expenditures and improved federal tax collection, which contributed to Fitch Ratings’ recent upgrade of Pakistan’s credit rating to ‘B minus’ with a Stable Outlook, provincial fiscal performance still requires stronger reforms. ICMA’s detailed analysis provides policymakers, researchers, and stakeholders with critical insights into fiscal imbalances, regional disparities, and opportunities for targeted interventions to ensure fairer and more sustainable development across all provinces.
