A recent article published in Dawn on August 18, 2026, reported that a Senate committee on Devolution had accused the federal government of bleeding Rs. 5-6 trillion annually on 25 ministries or bodies that should have been devolved to provinces and Council of Common Interests (CCI) after the 18th Constitutional Amendment. According to the Senate committee, such devolution would reduce federal government expenditure from Rs. 19.0 trillion to Rs. 13.0 trillion.
This was a significant claim and therefore I decided to examine it carefully. Administrative rightsizing of the federal government is a noble objective; I give credit to the Senate committee for thinking about that. Pakistan’s federal government spending to GDP ratio sits at about 13% of GDP for FY2026-27, which is not particularly high when compared to India at 13.6%, and Bangladesh at 13.7%. However, Rs. 6 trillion is a significant sum roughly amounting to 75% of Pakistan’s annual interest payments which currently sits at Rs. 8 trillion for FY2026-27. On interest payments, Pakistan stands out in the region: roughly 43% of federal expenditure goes to interest, compared with about 37% in Sri Lanka, 26% in India and 13.6% in Bangladesh, an exceptionally large burden that severely constrains fiscal space for other priorities.
So, the question becomes, if Islamabad abolished or transferred every ministry the Senate committee says it should, how much money would Pakistan really save? But before we get into the numbers, one thing that must be understood is that there is a fundamental difference between reducing federal expenditure, generating genuine savings for Pakistan as a whole, and expenditure simply transferring from Islamabad to the provinces or shifting administrative control to CCI.
The committee states railways, oil and gas, petroleum, WAPDA, major ports, federal regulatory authorities such as OGRA, NEPRA, IRSA, PEMRA and PTA, national planning, the census, standards in higher education and inter-provincial coordination must be administratively handed over to the CCI rather than the Federal Cabinet. The problem with the assertion that Rs. 6.0 trillion could be saved by transferring subjects like petroleum, electricity, railways, WAPDA and national planning to the CCI is that transferring jurisdiction from one part of government to another does not make the expense disappear. CCI supervision does not mean fragmentation of the national railway or electricity grid among four provinces.
Devolution alone is not austerity. Moving a function from Islamabad to Lahore, Karachi or Peshawar does not save money merely because the letterhead changes. Pakistan benefits only when duplication disappears, administrative overhead falls, accountability improves, and services are delivered more efficiently. What jumps out from examining the federal budget? The Senate's list mixes fundamentally different categories: provincial functions, CCI functions and self-financed or otherwise non-additive entities. In provincial-type functions such as school education, ordinary health delivery, housing and culture, genuinely federal duplication probably does exist.
The problem with the assertion that Rs. 6.0 trillion could be saved by transferring subjects like petroleum, electricity, railways, WAPDA and national planning to the CCI is that transferring jurisdiction from one part of government to another does not make the expense disappear.
Regarding CCI functions such as railways, petroleum, WAPDA, national planning, medical professions, census/statistics pertaining to Federal Legislative List Part II subjects and inter-provincial coordination, the Constitution does not say these functions disappear after the 18th Constitutional Amendment. It says the CCI “shall formulate and regulate policies” regarding Part II and “exercise supervision and control over related institutions.” Article 154 does not imply that the operating and capital costs of these institutions disappear merely because constitutional supervision shifts to the CCI. Even if one accepts that Railways should function under CCI supervision rather than Federal Cabinet control, Pakistan Railways will still need locomotives, employees, tracks, operations and capital investment. Moving its supervising authority does not save the Rs111 billion allocated in the FY2026–27 federal budget.
There are also entities that should not be added separately to the federal expenditure estimate without examining their financing arrangements. Some entities, such as Employees’ Old-Age Benefit Institution (EOBI) and Pakistan Medical and Dental Council (PMDC), are primarily financed from their own contributions or fees; Evacuee Trust Property Board (ETPB) generates substantial own-source revenue; while others, such as Press Information Department (PID) and Pakistan Infrastructure Development Company Limited (PIDCL), are financed through allocations already captured under their parent ministry or federal development programs. Adding these expenditures separately could therefore result in double counting.
Preliminary arithmetic is quite striking. If I add the reasonably identifiable non-overlapping direct appropriations associated with the 25 ministries and bodies identified by the Senate committee from the FY2026-27 federal budget including the main current and development appropriations for subjects like Federal Education, Higher Education Commission (HEC) and National Vocational and Technical Training Commission (NAVTTC), the total is only roughly Rs 609 billion, or Rs 0.61 trillion. That is about one-tenth of the Rs 6 trillion reduction implied by taking federal expenditure from Rs 19 trillion to Rs 13 trillion. And even that Rs 0.61 trillion is emphatically not “savings.” Much of it consists of: hospitals and health programs,
education and university spending, dams and water projects, rail investment;
agricultural research, housing and infrastructure projects.
The largest components of identifiable FY2026–27 federal budget footprint associated with the major ministries and functions highlighted by the Senate committee are Education at about Rs 200 billion, Railways at Rs 111.1 billion, Water Resources at Rs 107.3 billion, Health at Rs 53.3 billion, Planning and Development at Rs 37.2 billion, National Food Security at Rs 33.7 billion, Industries at Rs 29.5 billion, and Housing at Rs 22.3 billion. Smaller identifiable allocations include Inter-Provincial Coordination at Rs 5.02 billion, Climate Change at Rs 3.8 billion, Culture and Heritage at Rs 3.0 billion, Petroleum at Rs 2.6 billion, and Naya Pakistan Housing at just Rs 143 million.
But these figures are gross budget footprints, not estimates of actual savings. In areas such as health, education, housing, food security and culture, some federal functions could plausibly be devolved, but much of the expenditure would simply shift to provincial governments. In sectors such as Railways, Petroleum, Water Resources and Inter-Provincial Coordination, the underlying national or CCI-related functions would continue even if administrative control changed. The Water Resources figure is particularly important because it includes external development loans and advances, which are financing flows rather than administrative expenditure and therefore cannot sensibly be treated as potential savings.
Several other bodies cited by the Senate committee are not separately additive to this total. Some, such as EOBI and PMDC, are funded mainly through statutory contributions or fees, while others are already embedded within parent-ministry, PSDP or other federal allocations. Adding them again would risk double counting. The Rs 5.0–6.0 trillion savings claim cannot be reproduced from the direct FY2026-27 budgets of the 25 ministries and institutions named by the Senate committee. Their readily identifiable, non-overlapping direct budget footprint appears to be only around Rs 0.61 trillion and even much of that would represent expenditure transferred rather than eliminated.
The evidence presented here does not permit a reliable estimate of the genuine national saving from administrative rationalization. But it establishes an important gross readily identifiable footprint of Rs. 0.61 trillion for the federal appropriations associated with the committee's list, and much of that expenditure would continue either federally, under the CCI, or through provincial budgets. Within the Rs 0.61 trillion of expenditure identified here, genuine national savings would be substantially smaller than the gross amount. Reaching a saving measured in several trillion rupees would therefore require identifying and reconciling very large additional non-overlapping subsidies, grants, transfers, loans or other fiscal flows associated with these entities.