Govt to revise revenue distribution formula under NFC
Business
There is a proposal to reduce current 82% population-based share in distribution formula
ISLAMABAD (Mudassar Ali Rana) – The federal government has begun preparations to revise the revenue distribution formula among provinces under the new National Finance Commission (NFC) award.
According to sources, the federal government is considering proposing a reduction in the provinces’ current 57.5% share of federal revenues. Efforts will be made to build consensus with the provinces on this matter. However, in case of disagreement, the government is considering amending the existing formula through the 27th Constitutional Amendment.
Reportedly, there is a proposal to reduce the current 82% population-based share in the distribution formula. Instead, factors such as low population, taxation performance, climate change, and development progress may be included in the new formula.
Read more: No need for 27th amendment, says Ishaq Dar
Sources further revealed that the federal government is planning to transfer the responsibility of the Benazir Income Support Programme (BISP) to the provinces. Similarly, preparations are underway to hand over the Annual Development Plan (ADP) to provincial governments.
Under the new NFC Award, provinces will be required to take independent steps to increase their own revenues. For this purpose, the Ministry of Finance has instructed its officials to finalize proposals and prepare a working paper.
