Federal Minister for Planning Ahsan Iqbal expressed concern about the National Finance Commission (NFC) award’s current formula for distribution of divisible pool resources, claiming it places a significant burden on the federal government. He urged provincial governments to build consensus to relieve fiscal pressure on Islamabad.
Speaking at the Karachi Press Club on Monday, Iqbal highlighted that a large portion of development funds is being consumed by provincial shares, limiting the federal government’s ability to invest in vital projects related to water and food security.
“After transferring provincial shares, the Centre is left with insufficient funds for critical investments,” he said, stressing the importance of completing projects like the Diamer Bhasha and Mohmand Dams.
Iqbal further noted that the federal government covers Rs716 billion in expenses on behalf of the provinces, which significantly restricts fiscal space. He called on provincial governments to agree on a new formula that would ease the financial burden on the federal government, enabling faster completion of essential infrastructure projects.
The minister reiterated the government’s goal to turn Pakistan into a $1 trillion economy by 2035, under the “Uraan Pakistan” initiative, which was launched last December. “We had no choice but to turn to the IMF due to the policies of the previous government,” he said, emphasizing the need for strict adherence to the IMF program to ensure economic stability.
Iqbal also highlighted several positive economic indicators, including a 24% drop in inflation, a decrease in interest rates from 23% to 11%, a record $39 billion in remittances, and a stock market surge past 130,000 points. These, he said, signaled that Pakistan’s economy is on a growth path.
On the international front, Iqbal pointed to Pakistan’s improved diplomatic relations, including strengthened ties with China through CPEC 2.0 and the internationalization of the Kashmir issue. He also discussed the government’s prioritization of infrastructure development, particularly in Balochistan, with projects like the N-25 highway and the Sukkur-Hyderabad Motorway.
Additionally, Iqbal provided updates on key projects, including the Peshawar-Karachi Motorway and the K-IV water supply project for Karachi, alongside the extension of Karachi’s Green Line bus service.
