The National Finance Commission (NFC) Award, a constitutional obligation under Article 160 of the Constitution of Pakistan, is the bedrock of fiscal federalism in the country. The landmark 7th NFC Award, for instance, increased the provincial share to 57.5%, providing them with greater financial space. Horizontal imbalance, the disparity in fiscal capacity and needs among provinces, is addressed through a multi-criteria formula. The 7th NFC Award moved away from population as the sole criterion, incorporating factors like poverty/backwardness, revenue collection/generation, and area, with population still holding the majority weight. Educating the general public about the NFC Award is crucial for demanding better governance and efficient use of funds.

Source: The Patriot December 24, 2025 23:16 UTC