The Senate’s Finance Committee has decided to summon the finance ministers of all four provinces to address growing concerns surrounding the National Finance Commission (NFC) Award. A meeting is expected to take place next week, where the long-standing issues related to resource distribution between the federation and provinces will be discussed.
According to sources, the federal government has shown reluctance in releasing funds to the provinces for functions and departments that were devolved to them following the 18th Amendment. This hesitation has contributed to ongoing friction between the central and provincial administrations, particularly over the implementation of the NFC Award.
The Khyber Pakhtunkhwa (KP) government has emerged as a key voice of concern. It argues that the NFC Award does not account for the significant population increase in the province due to the merger of the Federally Administered Tribal Areas (FATA). KP officials stress that the increased population has put additional strain on provincial resources, which should be reflected in the financial allocations.
In a formal move, KP Chief Minister Ali Amin Gandapur has written to the President of Pakistan, urging a review of the NFC Award to incorporate the demographic changes brought about by the FATA merger. The provincial leadership maintains that revisiting the award is not just a matter of fairness but a constitutional requirement.
The NFC Award, which outlines the financial distribution formula between the federation and provinces, is supposed to be revised every five years. However, the current framework, established in 2009, has been repeatedly extended without an updated agreement for the last 15 years. Under this arrangement, 57.5% of the divisible pool is allocated to the provinces, while the federal government retains 42.5%.
The upcoming Senate Finance Committee meeting aims to push for a more equitable and updated distribution formula that reflects the country’s evolving demographics and economic responsibilities.
