Efforts are gaining momentum to develop a new formula for NFC Award, aimed at redefining how financial resources are shared between Pakistan’s federal and provincial governments.
According to Finance Ministry sources, the move seeks to bring greater balance, accountability, and fairness to the country’s fiscal structure.
Officials confirmed that the International Monetary Fund (IMF) has offered technical assistance to support the process, though no formal consultation has yet been held. “It is too early to say what the final formula will look like,” one senior official said, adding that the framework would be crafted “in the long-term national interest.”
The current NFC Award formula was last updated over a decade ago. Since then, Pakistan has witnessed major demographic and economic shifts, prompting calls for a more representative and modern approach. Sources revealed that deliberations are underway to address these changes, with a key meeting of the NFC Commission proposed for November 18 to discuss the details.
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Among the major proposals, the government is considering reducing the population share’s weight — currently 82% — and introducing new performance-based factors. These may include education and literacy levels, healthcare indicators, provincial tax collection efficiency, and environmental measures.
Officials believe such adjustments will make the new formula for NFC Award more equitable, rewarding provinces that show good governance and fiscal discipline while addressing regional disparities.
The proposed formula is expected to use Pakistan’s updated population base of 241.5 million. Moreover, the framework will aim to redefine fiscal powers between the federation and provinces, ensuring clarity in roles and responsibilities.
According to insiders, the new structure will focus on performance-based resource allocation to strengthen accountability and long-term sustainability in public finances.
Finance Ministry officials stressed that any changes will be introduced through broad consultation and consensus, ensuring that all provincial governments have a voice in shaping the new framework.
“The next NFC Award will not just distribute resources — it will set the direction for Pakistan’s economic governance and intergovernmental cooperation in the years ahead,” one official remarked.
