Education and health sectors are known to have massive impact on the quality of human life. In this context, the health sector is discussed in this study to analyse the impact of fiscal decentralisation on basic health infrastructure in Pakistan. Provincial datasets (1980–2001) from three provinces were used for the analysis of provincial health indicators. It was learnt that the health sector remained neglected both at the national and provincial level. The provincial analysis suggests that federal transfers improved hospital beds availability in the economically active provinces, which were presumably more efficient. Provincial autonomy, on the other hand, failed to play a role in the improvement of the health sector. The analysis highlights the social implications of federal transfers. Differences in results for economically distinct provinces hint towards the efficiency aspect of resource utilisation.