What Is the 18th Amendment and How Does It Affect the Budget?
The constitutional change that moved schools and hospitals to the provinces
By the ISN Media desk • June 2026 • Approx. 5-min read
This is a short, factual answer about the eighteenth amendment and its effect on Pakistan's budget. The figures are Budget Estimates from the Government of Pakistan, in billions of rupees. For the full explainer, see the 18th amendment, why federal sector figures understate spending.
What is the 18th amendment and how does it affect the budget?
The eighteenth amendment, passed in 2010, is a constitutional change that devolved most responsibility for health, education and local development to Pakistan's four provinces. It affects the budget because the provinces fund these services from the share of national revenue the centre transfers to them, about Rs 8,848 billion in 2026-27, so the small federal figures for education and health understate what the country spends in total. Most school and hospital funding now appears in the provincial budgets, not the federal one.
What the amendment did
The amendment abolished the Concurrent Legislative List, the set of subjects on which both the centre and provinces could legislate, and devolved most of those subjects to the provinces. Federal ministries that had run devolved functions were wound up or transferred, and responsibility for areas including health, education and local government passed to the provincial governments. It was, in part, a response to long-standing demands for greater provincial autonomy.
How the money follows
Devolving responsibility required devolving money. This happens through the National Finance Commission award, which divides national revenue between the centre and the provinces. A large share of federal tax revenue is transferred each year, about Rs 8,848 billion in 2026-27, and the provinces fund their devolved responsibilities from it. So the money for most education and health spending leaves the federal budget as a transfer and reappears as spending in the four provincial budgets.
Why federal figures understate spending
This is why the federal figures for education (about Rs 118 billion) and health (about Rs 37 billion) are small and understate national spending. A reader who looks only at the federal budget will conclude the country spends far less on schools and clinics than it does. The accurate national figure requires adding the provincial spending funded by the transfer, though even that national figure remains low by international standards.
Frequently asked questions
What is the 18th amendment and how does it affect the budget? A 2010 constitutional change that devolved health, education and local development to the provinces. They fund these from the roughly Rs 8,848 billion the centre transfers, so the federal figures for these sectors understate national spending.
What did the 18th amendment do? It abolished the Concurrent Legislative List and devolved most of those subjects, including health and education, to the four provinces, in response to demands for greater provincial autonomy.
What is the NFC award? The National Finance Commission award divides national tax revenue between the centre and the provinces. It is the mechanism that transfers the money for devolved responsibilities, about Rs 8,848 billion in 2026-27.
Why are federal education and health figures so small? Because most school and hospital funding is provincial under devolution. The federal lines fund higher education, regulation and federal institutions, not the bulk of the system.
Does devolution mean Pakistan spends enough on these sectors? No. Devolution explains why the federal figures are small, but even with provincial spending added, the national totals remain low by international standards.
When was the 18th amendment passed? In 2010. It was a major constitutional change that abolished the Concurrent Legislative List and devolved most of those subjects, including health and education, to the four provinces.
Sources and notes
- The eighteenth amendment to the Constitution of Pakistan (2010) and the National Finance Commission award framework are matters of public record.
- Government of Pakistan, Federal Budget 2026-27: the provincial transfer and sector figures are Budget Estimates in billions of rupees, rounded for readability.
ISN MEDIA