Sixteen years after the landmark constitutional reform, Pakistan’s public debt has grown tenfold while provincial transfers worth Rs76 trillion have failed to deliver measurable improvements in schools, clinics, or infrastructure.
MediaBites.com.pk l Courtesy: Farrukh Saleem, The News
Karachi, October 18, 2026: When Pakistan’s National Assembly passed the 18th Amendment to the Constitution in 2010, it set in motion one of the most significant fiscal decentralization exercises in the country’s history. Sixteen years later, the numbers tell a deeply troubling story.
Pakistan’s public debt and liabilities stood at approximately Rs10 trillion at the time of the amendment. Today, they stand at nearly Rs100 trillion, a tenfold increase in just sixteen years, a trajectory economists and policy analysts increasingly describe as unsustainable.
Enormous Resources, Little to Show
Between 2010 and 2026, Pakistan generated an estimated $5.33 trillion in cumulative GDP, equivalent to approximately Rs1,476 trillion at today’s exchange rate. Over the same period, the federal government collected Rs118 trillion in tax and non-tax revenue. Overseas Pakistanis remitted another $384 billion.
The inflows were substantial. The outcomes were not.
During this period, the federal government transferred Rs56 trillion to the provinces through the National Finance Commission (NFC) Award, along with Rs13 trillion in grants and Rs7 trillion in additional allocations, totaling Rs76 trillion sent from Islamabad to Karachi, Lahore, Peshawar and Quetta.
Put differently, Rs76 trillion is equivalent to Rs20 lakh for every Pakistani household. It was enough to build 1,013,333 schools, 253,333 clinics and 361,905 kilometers of roads. Yet, by most measurable indicators, the outcomes remain deeply inadequate.
Where the Money Went
In July 2026, the World Bank reported that more than 80 percent of provincial expenditure went to recurrent costs, primarily salaries and administrative expenses, while local governments’ share of total public spending had fallen below five per cent.
Punjab alone received Rs29 trillion through NFC transfers, equivalent to Rs2.3 lakh for each of its 128 million residents. Sindh received Rs14 trillion, equivalent to Rs2.5 lakh for each of its 56 million residents. Questions about how many clinics actually delivered services and how many schools were genuinely functioning remain largely unanswered.
Two Fundamental Failures
Analysts examining the post-18th Amendment period point to two structural failures. First, resources were transferred without transferring accountability. Provincial governments received unprecedented fiscal authority but had limited mechanisms to measure or enforce outcomes. Second, expenditures multiplied without any systematic effort to measure what they delivered.
What Needs to Change
Policy analysts have proposed four structural reforms to address the crisis.
The first is a national real-time public expenditure dashboard, a publicly accessible digital system that tracks every rupee from the federal treasury to provincial governments, from provincial treasuries to local governments, and from local governments to individual schools, clinics, and projects.
The second is a redesign of fiscal federalism. The current structure features three tiers of government with overlapping responsibilities and duplicated expenditures. The proposed principle is one function, one government, one budget, and one accountable authority.
The third is reforming the NFC itself, with effective, binding Provincial Finance Commissions that devolve both money and accountability from provincial capitals to local governments.
The fourth is a redesign of public accountability, through district-wise expenditure disclosures, school-wise learning outcomes and clinic-wise healthcare indicators, so citizens can assess what their local government received, spent and delivered.
The conclusion is stark: Pakistan does not have a resource problem. It has a systems problem. The money has been there. The accountability has not.
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