Think tank proposes three scenarios for new provinces in Pakistan
- By Web Desk -
- Aug 23, 2025
ISLAMABAD: A recent report by the Economic Policy and Business Development think tank has revealed that Pakistan’s existing administrative structure has failed to resolve key economic issues, calling for the creation of smaller provinces to improve governance and resource distribution, ARY News reported.
The report highlights three potential scenarios for restructuring Pakistan.
In the first scenario, Pakistan could establish 12 smaller provinces, reducing the population of each province to around 20 million. This would allow provincial budgets to reach Rs994 billion.
In the second scenario, 15 to 20 provinces could be created, with each having a population between 12 million and 16 million, and provincial budgets ranging from Rs600 billion to Rs800 billion.
The third scenario suggests dividing Pakistan into 38 federal divisions, each serving about 6.3 million people.
According to the report, Pakistan’s current population of 241.5 million is concentrated in just four provinces, resulting in an average provincial population of over 60 million.
This creates severe disparities in resource allocation. Currently, Punjab receives Rs5,355 billion, while Balochistan gets Rs1,028 billion, highlighting the imbalance.
Also Read: Pakistan’s experts call for new provinces to improve governance and public services
The report further notes that poverty rates vary widely across Pakistan—30 percent in Punjab, 70 percent in Balochistan, 48 percent in Khyber Pakhtunkhwa, and 45 percent in Sindh.
Overall, the average provincial poverty rate has reached 40 percent, exacerbated by rising unemployment and educational inequality.
The think tank argues that creating smaller provinces in Pakistan would enable better utilization of budgets, reduce poverty, and provide improved job opportunities.
It would also increase provincial revenue through reforms in agriculture and property taxation, potentially adding 1 percent to GDP from agriculture and 2 percent from property taxes.
Additionally, establishing new federal divisions in Pakistan could allow for more targeted economic policies, ensure better tax coordination between provinces and the federal government, and facilitate equitable distribution of resources.