BUDGET 2026-27: Centre, Punjab & Sindh agree on spending cuts

• Budget likely on Friday after president summons NA, Senate sessions today• National Economic Council finally set to meet today; KP still weighing participation• Federal, provincial govts to jointly cover Rs800bn shortfall• Extra FBR revenue to stay with Centre; ‘strategic needs’ may require Rs1.3-1.7tr• Sindh, Punjab agree to cut ADPs; KP, Balochistan not yet on board• Uplift plans worth Rs4.715tr likely to be revised down

ISLAMABAD: Signs that the federal budget may be presented later this week emerged on Tuesday after the government finally called a meeting of the National Economic Council (NEC) on the same day that sessions of the National Assembly and Senate were summoned by President Asif Ali Zardari.

A source in the NA Secretariat told Dawn that both sessions have been called budget sessions for 2026–27; however, it is expected that the budget will be presented in parliament on June 12.

This echoed Parliamentary Affairs Minister Tariq Fazal Chaudhry’s words, who said on Tuesday that the budget for the next fiscal year would likely be presented in parliament on Friday.

The NEC, meanwhile, is set to meet today (Wednesday) to finalise federal and provincial development plans after a broader agreement on cutting development and other expenditures at all tiers of the federation to cover around Rs800 billion revenue shortfall this year and jointly create similar, but higher, fiscal space next year for additional “strategic needs”.

Under the agreement reached between the PPP and PML-N, provincial shares from the federal divisible pool would stay frozen at the current fiscal year’s position. Any increase in FBR revenue next year on top of the current year’s collection would be retained by the Centre, informed sources said.

To avoid permanence and legal precedent, an ad hoc mechanism would be put in place under which the Centre would transfer full provincial shares to provincial accounts and the provincial governments would then credit the extra amount — higher than what they received this year — back to the Centre.

The sources said the additional amount being discussed for next year to be given up by the provinces was not fixed but dynamic, depending on FBR revenue collection, and could range anywhere between Rs1.3 trillion and Rs1.7tr.

To ensure that these additional amounts remain protected in favour of the Centre, both Sindh and Punjab would drastically cut their planned annual development plans (ADPs) for next year and reduce other expenditures. For this, the recent pattern of utilisation of petroleum subsidy by the........

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