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The President constitutes the 11th National Finance Commission of Pakistan, and chaired by the federal finance minister, the NFC will include provincial finance ministers and experts to recommend revenue distribution and fiscal powers.
The President of Pakistan has constituted the 11th National Finance Commission (NFC) under Article 160 of the Constitution. The commission will be chaired by the federal finance minister and will include the finance ministers of all four provinces, along with nominated experts.
The primary mandate of the NFC is to recommend a fair distribution of financial resources between the federation and provinces. It will review formulas for sharing tax and non-tax revenues, propose mechanisms for grants, borrowing powers, and determine cost-sharing arrangements on national development projects.
The NFC Award has historically been a cornerstone of Pakistan’s fiscal federalism, as it sets the revenue-sharing formula between the federation and the provinces. The last award was announced in 2010, which significantly increased provincial shares. However, since then, successive governments have failed to finalize a new award, leading to fiscal tensions and disputes between the center and provinces.
Economists note that the 11th NFC has been formed at a time when Pakistan’s economy is under severe fiscal pressure. Provinces are demanding a larger share of resources to fund development budgets and essential social sector expenditures. Experts argue that the commission will have to strike a delicate balance—providing adequate relief to provinces while ensuring the federation can manage its own financial obligations.
Political analysts believe that negotiations within the NFC will be tough, as resource distribution has always been a contentious issue. Smaller provinces, particularly Balochistan and Khyber Pakhtunkhwa, are expected to push for increased allocations and special grants to address historical imbalances and fund development in underprivileged regions.
According to the Ministry of Finance, the commission will soon begin its proceedings, holding consultations with financial experts and policy stakeholders. Its recommendations will be submitted to the president, after which a new NFC Award will be formally announced.
Experts emphasize that the 11th NFC Award is critical for Pakistan’s fiscal stability and federal structure, as it will determine how financial resources are shared in the coming years. The outcome will directly affect development projects, social sector funding, and the overall scope of provincial autonomy.
All eyes are now on whether the new commission can finalize a consensus-based formula within its term. In the past, NFC negotiations have often been delayed. However, given the current economic challenges, both the federal government and provinces are expected to push for an early agreement.
