The federal government of Pakistan has initiated the formation of the 11th National Finance Commission (NFC) to develop a new formula for distributing financial resources between the central government and the provinces. This move comes as the term of the 10th NFC is set to expire on July 23, 2025, without having finalized the 8th NFC Award.
Background and Purpose
Established under Article 160 of the Constitution of Pakistan, the NFC is responsible for recommending the distribution of net proceeds of specified taxes between the federation and the provinces. The last NFC Award was finalized in 2010 and expired in 2015. Since then, the existing award has been extended annually on an ad-hoc basis by the President of Pakistan.
The federal government has disclosed that it spent Rs638 billion on subjects constitutionally designated as provincial matters, such as health, education, and social protection, in the last fiscal year. This expenditure highlights the need for a revised resource-sharing formula to align with the devolved responsibilities post-18th Amendment.
