Islamabad: Planning Minister Ahsan Iqbal has proposed revising the 15-year-old National Finance Commission (NFC) Award and suggested freezing the national population figure at 241.5 million for the purpose of fund distribution among federal units.
In his recommendations, he urged Prime Minister Shehbaz Sharif to take action, highlighting that the NFC Award—which constitutionally requires revision every five years—has yet to be updated due to lack of consensus between the center and provinces. As a result, the President has been extending the award annually.
Facing mounting pressure on federal resources, the minister emphasized that restructuring is now essential.
He also recommended freezing other indicators such as water resources and climate risk data.
These suggestions come as the 10th NFC officially ended on July 21, and the Finance Ministry prepares to form the 11th commission.
Sindh has retained Asad Saeed as its member, Balochistan has nominated Farman, Musharraf Rasool Siyal is expected to represent Khyber Pakhtunkhwa again, and Nasir Khosa may represent Punjab.
The minister has proposed a new multi-dimensional formula for resource distribution that goes beyond just population.
Currently, 82% of resources are allocated based on population, which, according to him, undermines efforts to control population growth and encourages inflated figures.
He also suggested introducing provincial tax generation as a new metric, arguing that provinces with higher tax-to-GDP ratios and strong digital tax infrastructure should receive more resources.
Ahsan Iqbal noted that excessive dependence on the NFC share discourages provinces from expanding their local tax bases.
The minister further recommended linking resource allocation with outcomes in human development—such as education, health, gender equality—and investment in climate resilience, forest rehabilitation, and water infrastructure.
He emphasized that from the federal government’s 42.5% share, over Rs. 150 billion is spent annually on Azad Kashmir, Gilgit-Baltistan, merged tribal districts, and federal territories—areas that also deserve a rightful share from the divisible pool.
Moreover, he pointed out that the federal government allocates Rs. 716 billion for the Benazir Income Support Programme, despite social protection being a provincial responsibility post-18th Amendment.
Without adequate fiscal space, national initiatives like Special Economic Zones, Digital Pakistan, National Grid projects, dams, and human capital development cannot be effectively implemented, he warned. Constitutionally, consensus from all five governments is required for any new NFC formula. If even one disagrees, no changes can be made.
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Meanwhile, speaking at the opening session of a conference in Karachi, Ahsan Iqbal said that creative industries and the cultural economy are not merely sources of entertainment but serve as strategic tools for power, identity, and economic growth.
