The federal government has constituted the 11th National Finance Commission (NFC) after the president’s approval, with the Ministry of Finance issuing a formal notification on Friday.
The new NFC will play a key role in recommending how Pakistan’s tax revenues and grants are shared between the federation and provinces.
New NFC Commission formed
According to the notification, the previously established NFC in July 2020 has been dissolved, and the new commission has come into effect immediately. The Finance Division will serve as the secretariat of the commission.
Federal Finance Minister Muhammad Aurangzeb has been appointed as chairman of the nine-member body, while the finance ministers of Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan will serve as its members.
The commission also includes four expert members:
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Nasir Mahmood Khosa from Punjab
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Dr. Asad Saeed from Sindh
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Dr. Musharraf Rasool from Khyber Pakhtunkhwa
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Dr. Farmanullah from Balochistan
Terms of Reference (TOR)
The 11th NFC Commission will make recommendations on:
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Distribution of tax revenues between the federation and provinces
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Cost-sharing arrangements for projects of national importance
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Expenditure responsibilities of departments falling under provincial jurisdiction
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Grants-in-aid for provinces, currently funded by the federal government
In addition, the commission may review any other financial matter referred to it by the president.
Role in fiscal balance
Officials said that under the TOR, some expenses that are presently borne solely by the federal government will now be shared with provinces. The NFC is expected to give detailed recommendations to the president, aiming to strike a balance between federal and provincial financial responsibilities.
