Centre urged to reveal fresh National Finance Commission allocation
In a recent interaction with journalists in Hyderabad, PPP Chairman Bilawal Bhutto-Zardari has urged the PML-N-led federal government to announce a new National Finance Commission (NFC) award. He also called for the immediate convening of a meeting of the NFC.
Bilawal Bhutto-Zardari criticised the federal government and the Federal Board of Revenue (FBR) for failing to meet tax targets, stating that the root cause of this issue lies with them, not the provinces.
The current NFC Award, the 7th, which was originally promulgated in 2010, remains in effect over 15 years later. Discussions on the 10th NFC Award have reportedly begun, but no new award has been finalized as of August 2025. The 7th NFC Award significantly increased the provinces' share in the divisible financial pool, supporting provincial fiscal empowerment but also drawing calls for reform.
The PPP leader expressed concern that the federal government might shift the burden of its failures onto the provinces. He stated that resources related to responsibilities transferred to the provinces under the 18th Amendment should also be handed over to the provinces.
Regarding the Centre's lack of contact with PPP, a key ally of the federal government, regarding the 27th Amendment, Bilawal Bhutto-Zardari termed reports about potential legislation as "baseless rumours". He also expressed his support for the historic success of the 26th Constitutional Amendment, stating it is permanent, not tied to any specific era.
During his visit to Hyderabad, Bilawal Bhutto-Zardari observed rapid development in the city and mentioned various projects, including the Ring Road, underway. He also suggested that Hyderabad should have an airport.
The PPP leader's calls for a new NFC award and the convening of the NFC meeting come at a time when the federal government has seen improvements in overall tax-to-GDP ratio and non-tax revenue, boosting the divisible pool. Despite these improvements, the formula's heavy reliance on population data has drawn criticism for rewarding demographic growth over provincial development outcomes.
As the federal government engages in initial discussions on a new NFC Award, political consensus and constitutional adherence remain key challenges. The government, the opposition, and all stakeholders must work together to ensure a fair and effective distribution of resources that aligns with the realities of devolved responsibilities, economic realities, and governance incentives.
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