PPP Chairperson Bilawal Bhutto-Zardari warned on the party’s foundation day that anyone who seeks to strip provinces of their constitutional guarantees is “playing with fire”. His caution reflects mounting alarm, reopening a conversation that the country can no longer duck: What is the future of fiscal federalism in Pakistan’s 21st-century republic?
Federation rests on a delicate balance. In 2010, the 18th Amendment enfranchised this balance by devolving key powers and guaranteeing provinces their fair share of tax revenue. This was the fruit of hard political compromise; its passage sealed with the signatures of all major parties as a historic act of unity. It enshrined fiscal federalism as provinces now receive 57.5 per cent of the national divisible pool, a share that a sub-federation’s stake can never drop below. Those safeguards were designed precisely to prevent the next majoritarian government from arbitrarily starving the smaller units. Yet today, perpetual whispers of “fine-tune” amendments threaten to undo this consensus.
The newly enacted Twenty-seventh Amendment opens the door to revisiting both the slice of the revenue pie and the division of powers between the Centre and provinces. Education, population planning and other previously devolved subjects are on the table.
The danger might be existential. Once the share of provinces becomes negotiable, federal fiscal consolidation becomes code for centralisation. Not reform. Those who argue that shrinking provincial transfers is required to manage debt must also accept that the cost will be borne not by Islamabad, but by children whose schools never open, patients whose clinics remain unfunded, and citizens in remote districts who lose access to basic services.
Some economic studies have warned exactly this, emphasising that by carving out constitutional protections for provincial shares, the 18th Amendment had allowed a degree of stability and predictability in fiscal planning and governance that Pakistan had long lacked.
Still, the critics of rollback are not blind to the problems either. Provincial administrations have often struggled to raise adequate own-source revenue; decentralisation was never matched by capacity building at the local level, and many municipalities still await basic reform. Legitimate demands for fiscal discipline and efficiency remain valid.
The question now is not whether provinces received more than their ‘fair share’ but whether the federation can survive without credible, predictable autonomy for its parts. Bilawal deserves credit for making the terms public before political damage control began. By alerting citizens to the breadth of the challenge, he stirred a vital national debate.
Suppose we are to navigate this crisis without fracturing the federation. In that case, we need a framework built on trust wherein provinces should be encouraged to widen their tax base, with empowered local governments and transparent budgeting. The Centre may offer targeted support for national obligations–defence, macro-debt servicing, and sovereign functions–yet the costs of those obligations cannot be foisted on provinces by default.
Our history shows that power, once centralised, seldom returns. The test this time will be whether we defend constitutional balance or accept its erosion as a fait accompli. *