BUDGET 2026-27: Budget timing in doubt after NEC meeting put off again

• Centre, provinces struggle to reach consensus over fiscal space• Federal govt seeks over Rs1tr for strategic needs; provinces resist freeze on NFC shares• KP says demand could push provinces into deficit• CM’s adviser says issue now political, not technical• Seeks consultation with Imran before budget decisions

ISLAMABAD: The announcement of the federal budget 2026-27 remains uncertain as the federal government, its coalition partners and provincial governments struggle to reach consensus over the Centre’s demand for more than Rs1 trillion for strategic needs.

The meeting of the National Economic Council (NEC), officially called on Monday for June 8, was postponed for the third time at the last moment amid continuing negotiations over the freezing of provincial shares in the federal divisible pool under the National Finance Commission (NFC) award.

As a consequence, the federal budget 2026-27 may not be presented in parliament on June 10 as announced last week by the Ministry of Finance. The finance ministry’s official spokesperson did not respond to a request for comment on the revised plan for the release of the Economic Survey of Pakistan and the budget schedule.

Muzzammil Aslam, adviser on finance to the Khyber Pakht­unkhwa chief minister, confirmed that the Centre had told provinces that their financial shares under the NFC for the current year would not be increased next year and that any amount above the current year’s share would have to be returned to the Centre.

Aslam said the provinces had protested the demand, as it would push provincial budgets into deficit and make it difficult for them to run their governments. He said the federal government team suggested that provinces could freeze salaries and limit development schemes.

The Centre’s additional fiscal demand is over and above the Rs1.95tr cash surplus that provinces have already committed and signed under the national fiscal pact pushed by the IMF.

Speaking to journalists after a meeting with a federal team led by Planning Minister Ahsan Iqbal and comprising Finance Secretary Imdadullah Bosal, Aslam said he had not seen such a precarious situation in the past 21 to 22 years that he had been following budgets, and certainly not during the last six to seven years in which he had been directly involved in the budget process at the federal and provincial levels.

The KP team was led by Chief Minister Sohail Afridi.

Aslam said even the rescheduled NEC meeting on June 9 was uncertain, as many issues that had developed over time were too significant to be settled ahead of........

© Dawn Business