ISLAMABAD (Mudassar Ali Rana) – The International Monetary Fund (IMF) will monitor the meeting summoned by the federal government to consider the 11th National Finance Commission (NFC) Award on December 4.
According to highly placed sources, the Ministry of Finance has extended invitations to provincial finance ministers and technocrat members from each province. Federal Finance Minister Muhammad Aurangzeb will chair the introductory session.
This will be the first NFC Award after the 7th Award, which still governs the current resource distribution formula.
Technocrats Nasser Mahmood Khosa from Punjab, Asad Sayeed from Sindh, Mehfooz Ali Khan from Balochistan, and Musharraf Rasool from Khyber Pakhtunkhwa will participate in the meeting.
The Ministry of Finance had earlier proposed holding the meeting on November 10 and then on November 18, but the provinces requested postponements. The August 28 meeting had also been deferred at Sindh’s request. All NFC members have now been invited again, and the agenda includes reviewing recommendations, forming sub-groups, and outlining the roadmap for subsequent meetings.
President Asif Ali Zardari approved the formation of the 11th NFC on August 22. Officials say Finance Minister Aurangzeb has already briefed the prime minister and senior leadership on the 7th NFC Award, presenting comprehensive data on provincial revenues and outcomes. The presentation contained key proposals for the new NFC, which would now be discussed with the provinces.
Sources revealed that the federal government aimed to revise the existing revenue sharing formula. A proposal under consideration seeks to reduce the provinces’ 57.5% share under the current arrangement. The population based allocation of the horizontal distribution may also be adjusted. Other proposals include transferring the Benazir Income Support Programme to provinces, allocating new weightage for low population density, taxation performance, and forest area, and shifting parts of the annual development plan to provincial responsibility. Provinces may also be asked to contribute to major federal expenditures or increase their own revenue generation.
Meanwhile, Khyber Pakhtunkhwa has demanded an increase in its NFC share from 14.62% to 19.62% after the merger of the tribal districts, while also opposing any reduction in the provinces’ collective 57.5% share. KP has proposed raising the provincial share to 60% instead.