Islamabad( The COW News Digital)The federal government has postponed the much-anticipated 11th meeting of the National Finance Commission (NFC) following a formal request from the Sindh government, citing the emergency situation created by widespread floods across the country. The meeting, originally scheduled for Friday, was to be chaired by Finance Minister Muhammad Aurangzeb on the instructions of the President of Pakistan.
According to the Ministry of Finance, the session could not be convened after several members, including Balochistan’s technical representative Farmanullah, expressed their inability to attend due to pressing commitments. Out of nine commission members, eight had already indicated their unavailability, leaving the government with no choice but to issue a notification of postponement.
The NFC is a constitutional body responsible for determining the distribution of revenues between the federation and the provinces. It comprises nine members: the federal finance minister, four provincial finance ministers, and one technical member from each province. Current provincial representatives include Nasir Mahmood Khosa (Punjab), Asad Saeed (Sindh), and Dr. Musharraf Rasool Siyan (Khyber Pakhtunkhwa).
The meeting was expected to review critical fiscal challenges, particularly the growing budget deficit and the rising burden of public debt on the federal government. Officials were also due to present updated macroeconomic projections for the next five years, developed with input from the World Bank.
The NFC remains a sensitive political and financial matter. Under the 7th NFC Award of 2010, the provincial share of revenues from the federal divisible pool was increased by 10 percent to 57.5 percent, without imposing additional expenditure responsibilities on provinces. While this provided greater autonomy to provinces, it also strained federal resources.
Adding to the challenge, the Federal Board of Revenue (FBR) has consistently struggled to raise the tax-to-GDP ratio to 15 percent, as pledged, and even fell short of the IMF’s target of 10.6 percent. This shortfall has weakened Islamabad’s case to reduce provincial shares.
Despite fiscal difficulties, recent assessments by the IMF and Planning Commission project a stable outlook for Pakistan’s economy. The IMF has forecasted steady economic improvement through 2030, while the government’s “Udaan Pakistan” program aims for 6 percent GDP growth and significant export expansion.
With revenues expected to rise to 16 percent of GDP and expenditures capped at 18.8 percent, projections indicate Pakistan’s budget deficit could be reduced to 2.8 percent of GDP in the coming years. However, the NFC dispute continues to underline the delicate balance between federal responsibilities and provincial autonomy.
