Pakistan's long-delayed NFC meeting finally underway

Pakistan's federal government has convened a meeting of the 11th National Finance Commission (NFC) today, inviting all provinces for consultations on a new revenue-sharing formula, according to an official notification.

Federal Finance Minister Muhammad Aurangzeb and the finance ministers of all four provinces are attending the session.

NFC members from Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan are also participating.

Khyber Pakhtunkhwa’s finance adviser Muzammil Aslam and provincial member Dr. Musharraf are attending, along with Balochistan’s member Mehfooz Ali, Sindh’s member Dr. Asad Saeed, and Punjab’s technocrat member Nasir Mahmood Khosa.

The commission’s chair, the federal finance minister, is expected to constitute subgroups during the session.

According to sources, several proposals are under consideration for the new award, including reducing the population-based share from the current level under the 7th NFC Award and increasing the weight assigned to tax collection. A suggestion has also been floated to add a forest-coverage component to the revenue distribution formula.

One proposal would reduce the population share from 82% to between 67 and 72%, allocate 10.3% based on poverty levels, assign 10% to tax revenue generation, and dedicate 7% to forest resources.

The federal government has prepared a performance and revenue report for the provinces under the 7th NFC Award.

Meanwhile, Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan have completed their initial working papers for the new formula.

Khyber Pakhtunkhwa has recommended increasing allocations for the merged tribal districts and for costs associated with the war on terror. Sindh has said it will present its recommendations after reviewing the federal proposals.