The federal government of Pakistan has established eight specialized working groups to prepare for the 11th National Finance Commission (NFC) Award. The initiative aims to secure a fair distribution of financial resources between the central government and the provinces, according to officials.
These groups will examine various aspects of the NFC framework and produce recommendations for sharing revenues across the federation. Analysts say the move could improve fiscal balance and transparency in federal-provincial financial relations.
Key Groups to Handle Critical Financial Matters
One working group will focus on expenditure within provincial jurisdictions. Punjab’s Finance Minister will lead this group and evaluate how provinces can manage their allocated resources more effectively.
Another group will study the formula for dividing resources between the federal government and the provinces. Balochistan’s Finance Minister will lead this group and assess whether current allocation ratios remain fair, considering population, development needs, and fiscal capacity.
A third group will examine the national debt’s structure and its usage. Meanwhile, Khyber Pakhtunkhwa’s Finance Minister will head a group dedicated to improving the ratio of tax revenue to the country’s Gross Domestic Product (GDP).
Sindh’s Finance Minister will lead a group tasked with reviewing direct transfers of funds to provincial governments. The group will explore methods to ensure timely and transparent fund transfers.
Addressing Regional and Historical Challenges
Some groups will tackle region-specific and historically sensitive issues. One group will focus on the former Federally Administered Tribal Areas (FATA) and their integration into the NFC framework. Another, led by Finance Minister Muhammad Aurangzeb, will examine the structure of the divisible pool, the fund shared among provinces.
All eight groups will submit detailed recommendations to guide discussions between the federal government and provinces. Their proposals aim to enhance transparency, ensure fairness, and strengthen fiscal coordination across Pakistan’s governance system.
Timeline and Upcoming Meetings
Officials held the first meeting for the 11th NFC Award on December 4. During the session, representatives from the federal and provincial governments agreed to form these working groups. Sources say a second meeting is expected by mid-January, when the groups will present their reports. At that point, officials will finalize recommendations on resource distribution.
Significance for Fiscal Stability and Transparency
Experts say these measures are vital for maintaining financial balance in Pakistan’s federation. Transparent NFC procedures can prevent disputes over revenue sharing and ensure all provinces receive their fair share. The 11th NFC Award holds particular importance due to Pakistan’s growing population, regional development gaps, and rising debt levels.
Fair resource allocation will also allow provinces to fund healthcare, education, and infrastructure. In past years, disagreements over NFC shares occasionally strained relations between the center and provinces. Analysts say structured discussions and evidence-based recommendations can reduce such tensions.
With eight working groups in place, the government plans a structured approach to resource sharing. Observers believe this initiative could set a precedent for transparent financial governance, benefiting both the federal center and the provinces.
