Islamabad: Federal government and provinces opened the introductory session of the National Finance Commission (NFC) with pointed exchanges on revenue sharing, expenditure responsibilities and the future shape of fiscal decentralization, according to officials present at the meeting.
Provinces Press for Autonomy
Provincial representatives reiterated that major social sector programs including the Higher Education Commission (HEC) and the Benazir Income Support Programme (BISP) should be devolved fully to the provinces. They argued that income generation must grow at the provincial level and that each unit should bear the cost of its own expanding expenditures.
Khyber Pakhtunkhwa (KP) pressed its longstanding stance that the Seventh NFC Award has become ineffective after the 18th Constitutional Amendment. At the same time, participants reached consensus on formally recognizing and accommodating the merged tribal districts within KP under future resource allocations.
Sindh Challenges Federal Queries
Tensions rose when Sindh objected to federal questions about the use of NFC funds. Provincial officials responded that the federation has “no mandate” to seek such details under the constitutional framework.
Sindh further challenged certain terms of reference (TORs) during the introductory session. However, federal officials advised the province to approach the President of Pakistan if it wished to raise formal objections.
Federal Push for Shared Expenditure
Federal authorities argued that provinces must shoulder a greater portion of key national expenditures. According to official sources, even after the mandatory transfers are made, the federal government still spends an additional 15 percent of the national budget to cover provincial obligations. Islamabad urged all provinces to enhance revenue collection and assume responsibility for their recurring costs.
Cooperative Tone Despite Friction
Despite the pointed exchanges, participants from the federation and all four provinces agreed to cooperate as the NFC process moves forward. Punjab assured the federal government of its full cooperation in drafting the next award, signaling a possible path toward consensus.
The NFC is expected to continue detailed deliberations in the coming weeks as both sides seek a workable formula for equitable resource sharing under Pakistan’s evolving fiscal framework.
Read more: Absconder Proceedings Launched Against KP Chief Minister Sohail Afridi
