The Sindh cabinet has granted post-facto approval to a Memorandum of Understanding (MoU) signed between the provincial and federal governments to facilitate financial cooperation for national strategic and security-related requirements, while securing guarantees to protect Sindh’s constitutional share under the Seventh National Finance Commission (NFC) Award.
According to a cabinet summary circulated on June 11, 2026, Sindh authorities said several safeguards had been incorporated into the agreement to ensure that the province’s constitutional, financial and developmental interests remain fully protected.
The provincial finance secretary informed the cabinet that, in view of growing national security challenges and strategic requirements facing the country, the federal government had sought financial cooperation from provincial governments through mutual consensus arrangements.
The summary stated that Sindh had held a series of high-level negotiations with the federal government and made it clear that any financial support should not adversely affect the province’s constitutional rights under the Seventh NFC Award, fiscal stability, development programmes or the delivery of public services.
According to official documents, the MoU was signed on June 9, 2026, between Pakistan’s Ministry of Finance and Sindh’s Finance Department. The agreement was signed by the Sindh finance secretary on the directives of Chief Minister Syed Murad Ali Shah.
The government said the most significant provision of the agreement was the protection of Sindh’s constitutional share under the Seventh NFC Award. Under the arrangement, Sindh’s share will continue to be determined and transferred in accordance with constitutional procedures, with no changes to the existing formula for distributing revenues from the divisible pool.
Sindh has also secured a guaranteed minimum federal revenue assignment of Rs13.35 trillion for fiscal year 2026-27. The amount has been protected under Annex-A of the agreement, ensuring that any shortfall in federal revenue collection will not be passed on to Sindh, with the federal government assuming the associated fiscal risk.
The summary further stated that if federal revenues exceed the projected Rs15.264 trillion, additional proceeds will also be distributed under the NFC formula and Sindh will receive its full constitutional share. The province will not be required to provide any additional payment or grant to the federal government against such extra revenues.
Officials said the agreement does not impose any indefinite or permanent financial liability on Sindh. Any future national requirements beyond the agreed framework would be financed by the federal government through its own resources and the province’s obligations could not be increased unilaterally.
The cabinet was also informed that the existing fortnightly transfer mechanism under the NFC arrangement would remain intact, while a quarterly reconciliation system would be introduced to enhance transparency, accountability and timely financial adjustments.
Referring to Article 164 of the Constitution, the summary noted that a provincial assembly has the authority to make grants for purposes beyond its legislative competence, making such support for national strategic requirements constitutionally permissible.
According to the document, the agreement secures Sindh’s constitutional share under the Seventh NFC Award for the next three years, protects the province from federal revenue shortfalls, guarantees its full share in additional revenues, strengthens fiscal oversight and shields it from open-ended financial liabilities.
The Sindh cabinet subsequently granted post-facto approval, through circulation, to the MoU signed between the Government of Pakistan and the Government of Sindh on June 9, 2026.