11th NFC process stalls as second meeting delayed, working groups inactive

Nearly two months after its inaugural meeting, the 11th National Finance Commission (NFC) has made little progress, with its second session still unscheduled and most of its technical working groups yet to begin deliberations, Dawn reported. 

Officials had announced after the first meeting on December 4 that the second NFC session would be held between January 8 and January 15, followed by monthly meetings to finalise recommendations for the 11th NFC award. However, that timeline has not materialised, and the consultative process has slowed.

Eight technical working groups were notified in the second week of December, but only two have met even once. One group focuses on the fiscal impact of the merger of the former federally administered tribal areas into Khyber Pakhtunkhwa. Led by the KP finance minister, the group sought data from the federal finance secretary on how the merged districts’ share would affect allocations to other provinces. More than seven weeks later, the group is still awaiting the required details.

Another working group, led by the federal finance minister, met once in late January to discuss the composition of the divisible pool. This group is examining whether any taxes should be added to or removed from the pool, including a federal proposal to exclude customs duties on the grounds that international trade is a federal subject.

The remaining six working groups have not convened. These groups cover vertical distribution of resources between the federation and provinces, national debt composition, tax-to-GDP improvement, straight transfers to provinces, criteria for horizontal distribution, and sharing of federal expenditures incurred in provincial domains.

According to the report, the delays have been attributed to the overseas engagements of senior officials. With no clarity on the next meeting date, officials and provincial representatives say uncertainty persists over when the long-pending 11th NFC award process will move forward.