ISLAMABAD (Mudassar Ali Rana) – In a major development towards revising the National Finance Commission (NFC) Award, the federal government has called a meeting of provincial representatives on November 18, marking the first formal step in initiating the 11th NFC Award.
Reliable sources in the Ministry of Finance confirmed that invitations have been sent to all provinces for the upcoming session, which will be chaired by Finance Minister Muhammad Aurangzeb, who also serves as chairman of the commission.
Earlier, a meeting was scheduled for November 10, but the date was postponed at the request of the provinces.
According to sources, if the November 18 session proceeds as planned it will represent a significant breakthrough in the long delayed process of finalising a new financial distribution formula between the federation and the provinces. The International Monetary Fund (IMF) is also expected to remain on board during discussions of the new award. The meeting will review recommendations for the commission, establish sub groups, and finalise a roadmap for the coming months.
The 11th NFC was formally constituted by the President of Pakistan on August 22, but its inaugural meeting, originally planned for August 28, was postponed at Sindh’s request due to widespread flooding in the province.
Sources revealed that Finance Minister Aurangzeb has already briefed the prime minister and senior officials on the existing seventh NFC Award, presenting detailed data on provincial revenues and expenditures. That same presentation reportedly included key proposals for a new formula, which the federal government intends to discuss with the provinces. One major proposal under consideration is to revise the existing revenue sharing formula, under which provinces currently receive 57.5% of divisible pool revenues. The federal government is likely to request a reduction in this share, citing fiscal constraints. Should consensus with provinces not be reached, the government may consider introducing a 27th Constitutional Amendment to modify the formula.
Additionally, the proposed reforms include, transferring the Benazir Income Support Programme (BISP) to provincial administrations, Introducing new criteria for revenue distribution, including population size, taxation performance, forest coverage, and other areas like shifting portions of the Annual Development Plan (ADP) to provincial control, requiring provinces to enhance their own revenue generation or contribute to key federal expenditures. Each province’s finance minister and a nominated technocrat will serve on the commission. The technocrat members include Nasir Khosa (Punjab), Asad Sayeed (Sindh), and Musharraf Rasool (Khyber Pakhtunkhwa), while the Federal Finance Secretary will serve as the commission’s official expert.
Sources within the Ministry of Finance added that if meetings proceed with consistent momentum, the new NFC Award could be finalized within six to eight months, however, the process could extend to a year depending on the pace of negotiations and provincial consensus.