Years of fiscal decentralisation have failed to narrow Pakistan’s regional spending disparities, with provincial capitals continuing to receive significantly higher public spending per person than the rest of their provinces.According to the World Bank’s Strengthening Fiscal Federalism report, cited by The Express Tribune, Quetta recorded the widest spending gap among provincial capitals. Per capita expenditure in the city stood at Rs 57,000, compared with just Rs 12,000 in the rest of Balochistan, representing a gap of around 475%.Lahore recorded the second-largest disparity, with per capita spending of Rs 31,000 compared with Rs 7,000 in other districts of Punjab. In Khyber Pakhtunkhwa, per capita expenditure in Peshawar was about Rs 35,000, while the rest of the province received around Rs 10,000 per person.Although Karachi recorded the smallest gap among the provincial capitals, the report found that per capita spending there was still 178% higher than in the rest of Sindh.The World Bank noted that while spending disparities have narrowed since 2009, provincial capitals continue to receive a disproportionately large share of development funding. It also found that wealthier districts consistently attract higher budget allocations, while poorer regions continue to face chronic underinvestment.According to the report, there was no clear link between district-level funding and poverty rates or social indicators such as education, healthcare and infrastructure needs.The findings were particularly significant for Balochistan, where longstanding underdevelopment and limited employment opportunities have frequently been cited as factors contributing to unrest. Despite the province recording budget surpluses, Quetta continued to receive substantially higher public spending than other districts.The report also highlighted weaknesses in local governance, noting that provincial finance commissions remain largely inactive and local governments receive only a limited share of provincial resources. As cited by The Express Tribune, the share of total government expenditure managed by local governments has fallen from around 10% in 2005 to 4.7% in 2024, despite constitutional provisions intended to strengthen decentralisation.The World Bank further raised concerns over the outcomes of increased spending on education and healthcare. It noted that although Punjab, Sindh and Balochistan significantly increased education budgets between FY09 and FY23, school enrolment and literacy indicators either remained stagnant or declined in some regions, according to The Express Tribune.The findings come days after Pakistan’s auditor general uncovered widespread financial irregularities, procedural lapses and weak administrative oversight across several federal ministries, with the Ministry of Interior and Narcotics Control recording the highest number of audit objections. The audit flagged unrecovered government dues, undeposited revenue from arms licences, discrepancies in licence digitisation, and questioned administrative decisions, procurement practices and financial record-keeping across multiple departments.The report also raised concerns over the issuance of stamp papers to vendors with cancelled licences, recruitment practices in several security agencies, and the Anti-Narcotics Force’s expenditure on helicopter overhauls without an open competitive bidding process. Auditors further questioned the handling of a UNICEF-funded child labour survey after officials failed to produce financial records to verify expenditure.
