Raza Rabbani warns against any budget move undermining provincial autonomy

ISLAMABAD: Senior Pakistan Peoples Party leader Raza Rabbani on Thursday cautioned that political parties should refrain from supporting the federal budget if it compromises provincial rights, incomes, or constitutional autonomy.

In a statement, Rabbani said that any attempt by the federal government to interfere with provincial financial rights would be unacceptable.

“If the government insists on playing with provincial incomes, rights and autonomy, political parties should desist from supporting the budget,” he said.

The former Senate chairman also opposed any legislation affecting provincial or fiscal autonomy that is introduced under pressure from the International Monetary Fund, arguing that constitutional arrangements should not be altered to satisfy external financial requirements.

Rejecting IMF-driven fiscal targets for provinces, Rabbani said the imposition of revenue and primary surplus benchmarks would undermine the authority of Parliament and reduce the budget process to merely endorsing a pre-determined fiscal framework.

Rabbani described the Benazir Income Support Programme as a “red line,” warning against any move to curtail or restructure the country's flagship social protection programme.

He also suggested an alternative fiscal arrangement under which provinces would collect all taxes and subsequently transfer the federal government's share, instead of the current revenue-sharing mechanism.

Budget delayed amid IMF, PPP consultations

His remarks came a day after Ishaq Dar announced that the federal budget for fiscal year 2026-27 would now be presented on June 10, following delays linked to unresolved discussions with the IMF and coalition partners, particularly the PPP.

According to government sources, the federal government is seeking an additional fiscal space of approximately Rs1.7 trillion from the provinces through adjustments in the National Finance Commission Award and by transferring certain expenditure responsibilities to provincial governments.

Several key issues remain unresolved, including the size of the development budget, allocations under the Public Sector Development Programme, power-sector subsidies, and the future financing structure of BISP.

PPP resists shift of social protection costs

Sources indicated that the federal government has proposed that provinces bear at least half of the expenditure burden of BISP. However, provincial administrations have reportedly resisted the proposal, arguing that it would place an additional strain on their finances.

Meanwhile, Bilawal Bhutto Zardari, while campaigning in Gilgit-Baltistan, reiterated his party’s commitment to protecting BISP and called for an increase in its allocation in the upcoming budget.

The PPP and federal government continue consultations on revenue distribution, development spending, and fiscal arrangements, as efforts intensify to finalise the budget framework ahead of its presentation next week.