The federal government has begun the process to constitute the 11th National Finance Commission (NFC) to finalise a new formula for resource distribution between the centre and provinces, as the term of the 10th Commission approaches its end on July 23, 2025, without concluding the 8th award, The Express Tribune reported.Â
During a meeting of the Council of Common Interests (CCI) held on April 28, federal authorities informed the provinces that the Finance Division had initiated formal correspondence requesting nominations for technical members to the new NFC. Each province is entitled to two members—its finance minister and a technical expert—under the Constitution.
Sindh has nominated economist Dr Asad Sayeed as its technical member, while its finance minister will serve as the second representative. The Khyber Pakhtunkhwa government has yet to finalise its nomination, with provincial officials pressing for a meeting of the 10th NFC before the upcoming federal budget to address unresolved issues, including net hydel profits and allocations for merged tribal districts.
The 10th NFC is set to complete its five-year term on July 23 without reaching consensus on the 8th award. The last award, finalised in 2010, expired in 2015 and has since been extended annually by the President through ad-hoc arrangements due to continued disagreements among stakeholders.
Under the 7th award, the provinces get 57.5% of the resources and yet the federal government has been spending money in provinces despite scarcity of resources. The government and four provinces signed a weak National Fiscal Pact last year under the IMF guidelines, which does not have legal cover.
Officials indicated that a revised formula is needed to reflect current fiscal challenges, including demands for increased provincial shares and the federal government’s shrinking fiscal space. The process of reconstituting the NFC comes amid growing debate over intergovernmental fiscal responsibilities and the need for a legally enforceable National Fiscal Pact.
