Islamabad_ The 11th NFC Meeting in Islamabad concluded on Thursday with a major decision to form six to seven working groups that will study Pakistan’s most pressing fiscal challenges faced by the provinces.
The session, chaired by Finance Minister Muhammad Aurangzeb, brought together provincial finance officials, including the chief ministers of Sindh and Khyber Pakhtunkhwa, while Punjab and Balochistan were represented by their finance ministers. Senior officials from the Federal Board of Revenue and private members from all provinces were also present.
Working groups to review fiscal structure
Officials involved in the meeting indicated that the next sitting of the 11th NFC Meeting is expected on January 8 or 15. The newly approved working groups will examine a range of issues, including a dedicated group for the former FATA districts.
This group will explore how the merged areas can be fully incorporated into Pakistan’s fiscal framework.
| Feature | Scenario I (Security & Admin Focus) | Scenario II (Social & Education Focus) |
| Upfront Deductions | Money is taken out first for:1. War on Terror2. Water Security3. Civil Armed Forces4. Grants to AJK & GB | Money is taken out first for:1. BISP (Benazir Income Support) 2. HEC (Higher Education Commission) |
| The Split | Remaining money split 57.5% (Provinces) / 42.5% (Centre). | Remaining money split 57.5% (Provinces) / 42.5% (Centre). |
| Outcome | Slightly eases federal financial pressure by FY2027. | Increases federal resources by 11–12% by FY2030. |
Sindh Chief Minister Murad Ali Shah described the discussion as positive, and KP Adviser on Finance Muzzammil Aslam said all participants shared their views freely.
He added that no proposal was placed on reducing provincial shares under the NFC Award, countering widespread speculation on social media.
Finance Minister Aurangzeb called the opening session an important constitutional responsibility. He said the federal government was committed to holding the meeting without delay and noted that earlier plans were postponed because of severe floods in Punjab, KP and Sindh. He stressed that transparent dialogue was essential to resolving concerns, adding that the Islamabad is ready to listen “with open minds.”
Debate over revising the NFC Award
Alongside the 11th NFC Meeting, the Ministry of Planning has circulated a paper titled “Revisiting the NFC Award”, proposing changes in both vertical and horizontal distribution of resources.
The paper suggests upfront deductions for national priorities and revised formulas that reduce the weight of population while considering revenue generation.
| Region | Current Share | Option 1 | Option 2 | Option 3 (Radical Shift) |
| Punjab | 51.74% | 47.26% | 44.73% | 41.89% |
| Sindh | 25.55% | 25.05% | 25.55% | 25.09% |
| Khyber Pakhtunkhwa | 14.62% | 17.12% | 16.95% | 15.67% |
| Balochistan | 9.09% | 9.75% | 11.50% | 12.02% |
| Islamabad (ICT) | — | 0.83% | 1.26% | 5.33% |
Experts note that reforms are necessary, as federal deficits remain high and provincial revenues stay stagnant at around 1% of GDP.
Strengthening fiscal federalism will require both structural changes and improved provincial revenue performance.
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