11th NFC Holds Inaugural Session, Decides to Form Working Groups on Fiscal Matters

ISLAMABAD: The inaugural session of the 11th National Finance Commission (NFC) concluded with a key decision to establish multiple working groups to advance discussions on fiscal issues between the federation and provinces.

The meeting, chaired by Finance Minister Muhammad Aurangzeb, was attended by the chief ministers of Sindh and Khyber Pakhtunkhwa—participating in their capacity as provincial finance ministers—along with the finance ministers of Punjab and Balochistan and other private members.

During the session, the federal finance ministry briefed the participants on the country’s financial situation, while representatives from all four provinces presented updates on their respective fiscal positions.

Finance Minister Aurangzeb thanked all chief ministers, provincial finance ministers, secretaries, and members for attending, calling the meeting an important step in fulfilling a constitutional responsibility under **Article 160** of the Constitution of Pakistan. He noted that the federal government and the prime minister were keen to convene the 11th NFC without any delay, despite the disruptions caused by devastating floods in Punjab, Sindh, and KP.

He emphasized that addressing concerns and speculation regarding the NFC requires sincere and transparent dialogue. “We are here with open minds and without prejudice. Our first priority is to listen to each other,” he said. “The federation is fully committed to hearing the provinces’ viewpoint, and we expect the same spirit of constructive cooperation among provinces.”

Aurangzeb praised the provinces for signing the **National Fiscal Pact**, calling it evidence of collective commitment to national priorities — including achieving mandatory surpluses and supporting the ongoing IMF program. He added that Pakistan has faced extraordinary challenges this year, including severe floods and heightened security threats from India, but remained united as a strong federation.

He expressed hope that the upcoming weeks and months would feature meaningful debate and cooperation to successfully conclude the 11th NFC Award.

### Next Meeting Expected in January

Sources indicated that **6 to 7 working groups** will be formed, while a separate group will address issues related to the former FATA region. The next NFC meeting is expected to take place on **January 8 or January 15**.

After the meeting, Sindh Chief Minister Murad Ali Shah confirmed that the working groups would move forward with the core financial matters.

### Planning Ministry’s Proposals

The Ministry of Planning has submitted two new proposals to the prime minister for resource distribution.

The first proposal suggests deducting **2.5% from the divisible pool** to fund counterterrorism efforts, water security, civil armed forces, and grants for Azad Kashmir and Gilgit-Baltistan — leaving provinces with **57.5%** and the federation with **42.5%** of the resources.

The second proposal recommends subtracting the expenses of the **Benazir Income Support Programme (BISP)** and the **Higher Education Commission (HEC)** from the divisible pool before distribution — a move expected to increase federal resources by **11–12% by 2030**.

Another suggestion includes reducing the weightage of population in the NFC formula and giving greater consideration to factors such as **revenue generation, agricultural fertility, and forest cover**.

The detailed scrutiny of these proposals will be taken up in subsequent NFC meetings under the newly formed working groups.