Government will hold discussions openly, listen to provinces’ stance, says FinMin
The inaugural meeting of the 11th National Finance Commission concluded with parties agreeing to consider Khyber-Pakhtunkhwa’s share in the NFC award after the merger of FATA and PATA into the province. A working group will be formed to review federal and provincial shares.
Its first session, originally scheduled for August 27, was postponed several times at the request of the Sindh government and the Prime Minister’s Office
Finance Minister Muhammad Aurangzeb described the meeting as an important step for fulfilling constitutional responsibilities. He noted that the term of the 10th NFC Award ended on July 21, this year, which increases the significance of today’s meeting.
Aurangzeb said the federal government was committed to holding the inaugural meeting without delay and that the prime minister took a keen interest in ensuring its timely convening.
He added that the provinces had shown commitment to fulfilling their constitutional responsibilities in a timely manner.
The finance minister said discussions would be conducted with an open mind, stressing that the federal government would consider the provinces’ perspectives. He expressed confidence that the provinces would engage constructively.
Read: Centre proposes provincial share cuts ahead of crucial NFC talks
He also appreciated the provinces for signing the National Fiscal Pact, calling it a demonstration of shared resolve and cooperative spirit
Aurangzeb highlighted the NFC’s role in ensuring fair resource distribution, fiscal stability, and sustainable economic growth, adding that finalising the 11th NFC Award remains a key objective.
Finance Adviser Muzammil Aslam said the meeting was conducted in a cordial atmosphere, noting that major provinces had extended support to smaller provinces, a development he described as positive.
All parties supported considering Khyber-Pakhtunkhwa’s share in the NFC award following the merger of FATA and PATA into the province. A working group will be formed to review federal and provincial shares and related legal matters.
Aslam stated that the working group is set to examine other legal matters related to federal and provincial shares, with opinions to be sought from the Law Division and the Attorney General.
Sindh Chief Minister Murad Ali Shah said the session was conducted in a positive atmosphere and described it as an initial meeting focused on outlining the way forward and scheduling the next session.
It was agreed that the Ministry of Finance will prepare a joint statement on the meeting, share it with the provinces, and release it to the media.
Read more: K-P to participate in NFC session despite reservations: CM Afridi
Restructure of share
Planning Minister Ahsan Iqbal proposed multiple options for redistributing resources among the provinces to strengthen the fiscal position of smaller federating units
According to the proposals submitted to Prime Minister Shehbaz Sharif, Khyber-Pakhtunkhwa’s share could increase from 15.7% to 17.1%.
The K-P government is seeking an increase in its share to nearly 20% following the merger of the former tribal districts.
Federal sources said that while the provinces showed willingness to share federal expenditures, they were not ready to reduce their revenue shares significantly.
The Planning Ministry report noted that while the NFC Award envisioned shared responsibility for revenue generation, provincial revenues have not expanded in line with the award’s objectives.
Under the current NFC Award, population carries an 82% weight, while poverty, revenue generation, and inverse population density carry smaller weights. The Planning Ministry has proposed changes that could reduce Punjab’s share by about 10% and Sindh’s by 0.5%.
Also read: Kundi denies any move to impose governor’s rule in K-P
Khyber-Pakhtunkhwa’s share could increase by 1% to 2.6%, Balochistan’s by up to 3%, and the Islamabad Capital Territory may receive up to 5% for the first time.
K-P’s reservations
Khyber-Pakhtunkhwa Planning Minister Sohail Afridi said the federal government owes the province Rs1.3 trillion under the NFC and highlighted that the former tribal districts, merged administratively in 2018, have not yet been financially integrated.
Afridi urged the federal government to consider the province’s proposals, warning that decisions taken behind closed doors could affect K-P. He added that if the centre adopts the province’s recommendations, the K-P government would implement them and ensure law and order.
Speaking outside Adiala Jail, Afridi said he had attended the NFC meeting to present K-P’s position. He noted that after the 25th Amendment, the tribal districts were merged into the province but had not yet been allocated their share, which he described as inconsistent with the constitution.
In principle, participants agreed to form a subcommittee, which will present its recommendations by January 8. The next NFC meeting is scheduled for January.
Afridi said that since the merger of the tribal districts, the province had not yet received its full share under the NFC. He noted that two NFC meetings have been held since the current government took office in 2018, and meetings could not continue after the 2022 regime change. He expressed hope that the province’s proposals will now be considered.
The NFC meeting, originally scheduled for a brief session, continued for over an hour.
