Fiscal Federalism: An Analysis of Khyber Pakhtunkhwa's Share in the National Resources in the Post-18th Amendment Period

Abstract

Decentralization of power and distribution of resources has remained a contentious issue between the Federal government and provincial governments in Pakistan. The 7th NFC award and 18th amendment to the constitution have further strengthened the federalist structure in Pakistan by adopting multiple criteria and ensuring provincial autonomy respectively. The Constitution of 1973 provided a well-structured mechanism for fair and just distribution of resources and inter-governmental harmony in the form of NFC and CCI and offered solutions to the contentious issue of distribution of power. Khyber Pakhtunkhwa is blessed with abundant natural resources in the form of water resources, crude oil production, natural gas and LPG and making extensive contributions to the energy sector of Pakistan. Although the constitution of Pakistan, in theory, is clear regarding revenue distribution the cleavages in its practical implementation in the context of the fiscal relationship between the federal government and Khyber Pakhtunkhwa are creating hurdles in their smooth relation.