New Provinces Could Cost Pakistan Rs. 730 Billion Annually: Report

Notably, a private think tank has cautioned that creating new provinces in Pakistan could impose a substantial recurring burden on public finances, with annual costs reaching as much as Rs.

Key points

• The report applied district-level population and area data from the Pakistan Bureau of Statistics' 2023 census to construct the proposed units.
• Under the first scenario, Punjab would be divided into Bahawalpur, South Punjab, and the remaining Punjab, increasing the country's total number of provinces from four to six.
• The second scenario would treat every existing administrative division in Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan as a separate province.
• In its latest market analysis, the Policy Research Institute of Market Economy (PRIME) examined the fiscal implications of two provincial restructuring scenarios.
• Under the six-province scenario, South Punjab would receive an illustrative allocation of Rs.

It has recommended prioritizing stronger local governments if the objective is to improve public service delivery.

In its latest market analysis, the Policy Research Institute of Market Economy (PRIME) examined the fiscal implications of two provincial restructuring scenarios. Govt Admits Old Imported Wheat is Poor Quality.

Meanwhile, the report estimates that creating two extra provinces in Punjab could cost between Rs. 46.9 billion and Rs. While converting all 30 existing administrative divisions into provinces could raise the net recurring cost to between Rs, 56.2 billion annually. 609.2 billion and Rs. 730.3 billion.

For context, the analysis focuses on how the existing provincial share of the divisible pool would be distributed among proposed units under the 7th National Finance Commission (NFC) Award and how much extra recurring expenditure new provincial governments would require. It does not assess whether creating more provinces would necessarily improve governance or public service delivery. PRIME Examines Two Provincial Restructuring Scenarios. The report considers two feasible models for restructuring Pakistan's provincial boundaries.

Under the first scenario, Punjab would be divided into Bahawalpur, South Punjab, and the remaining Punjab, increasing the country's total number of provinces from four to six. Govt Budget on Internet in Remote Areas Made public.

Notably, the second scenario would treat every existing administrative division in Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan as a separate province. This would create 30 provinces in total, including 26 new units.

PRIME remarked the 30-province model is not presented as a recommended territorial arrangement. Instead, it serves as a fiscal stress test to assess the implications of creating a substantially more fragmented provincial system.

Meanwhile, the report applied district-level population and area data from the Pakistan Bureau of Statistics' 2023 census to construct the proposed units.

Meanwhile, the report estimates that the core recurring cost of operating a new provincial administration would range from Rs. 22.4 billion under a low-cost scenario to Rs. 25.9 billion under a high-cost scenario. This would translate into an annual cost of Rs. 46.9 billion to Rs. 56.2 billion for two new provinces, and Rs. 609.2 billion to Rs. 730.3 billion for 30 provinces. How the NFC Allocations Stack Up.

Under the six-province scenario, South Punjab would receive an illustrative allocation of Rs. While Bahawalpur would receive Rs, 1 trillion under the existing NFC Award. 537 billion.

Under the 30-province model, allocations would vary considerably, ranging from Rs. 720 billion for Lahore and Rs. 691 billion for Karachi to Rs. 46 billion for Loralai and Rs. 50 billion for Zhob. The analysis estimates that 11 of the 30 proposed units would receive less than Rs. 150 billion annually. Smaller Units Face Higher Fiscal Burdens.

While 14 would exceed it, using a 10 percent fiscal sustainability benchmark based on the low recurring-cost estimate, 16 of the 30 proposed provinces would remain at or below the threshold.

Notably, the burden would be particularly high in the smallest units. Even under the low-cost estimate, the core provincial administration structure would absorb around 49 percent of Loralai's NFC allocation, 45 percent of Zhob's, and 37 percent of Rakhshan's.

Every proposed province with a population below 1.2 million would require more than one-third of its NFC allocation to finance the core provincial administration structure. PM Asked to Act Against Officers Hiding Dual Nationality.

Meanwhile, the findings indicate that the fiscal implications of restructuring depend heavily on the number and size of provinces created. While smaller division-based provinces would face disproportionately high administrative costs relative to their anticipated NFC resources, limited restructuring involving relatively sizeable units would produce a much smaller recurring burden.

Meanwhile, the analysis additionally warns that creating new provinces could put further pressure on the fiscal resources of smaller provinces, particularly those with lower NFC allocations and limited revenue-generation capacity. A greater share of their available resources would be consumed by recurring administration expenses, leaving less fiscal room for public services and development spending.

PRIME emphasized that provincial restructuring should be evaluated not only in political and administrative terms but additionally through a clear fiscal framework. Stay Connected with ProPakistani.

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For now, new Provinces Could Cost Pakistan Rs. 730 Billion Annually: Report remains the part of the story worth watching, and further updates are likely as more details are confirmed.