Federalism is created by a state having heterogeneous population with a desire to have provisions for adequate distribution of economic resources within a democratic form of government. The economic interaction is usually guaranteed by the constitutional arrangement of the land. The desire for the creation of a federation may be the economic interaction, interdependence on each other by the Centre and federating units. Proper distribution of powers between the Centre and Federating Units flourish when the residuary powers are vested in the federating units. The 18th Constitutional Amendment made a landmark in the history of Pakistan as it introduced a paradigm shift in the democratic set-up of the country. This shift had long been cherished by most of the mainstream political parties as it gives an opportunity to the ruling parties to complete the tenure of the government.