President Zardari Approves Change in 11th NFC After Balochistan Revises Nomination
Introduction
President Asif Ali Zardari has approved an amendment in the 11th National Finance Commission (NFC) setup following a fresh nomination by the Balochistan government, according to an official statement from the presidency. The NFC, which plays a crucial role in determining revenue-sharing between the federation and provinces, is gearing up to finalize a new award amidst rising economic and natural disaster challenges.
What is the 11th NFC Award?
The National Finance Commission Award (NFC Award) is a constitutional mechanism under Article 160 of the Constitution of Pakistan. It defines how federal divisible resources (mainly tax revenue) are shared between the federal government and the provinces.
The 11th NFC Award, formed on August 22, 2025, is chaired by Finance Minister Muhammad Aurangzeb and includes:
- Four provincial finance ministers
- Four non-statutory members (one from each province)
Balochistan’s New Nomination
Initially, Balochistan had nominated a representative, but later revised its decision, recommending Mahfooz Ali Khan as its non-ex-officio member. The president has approved this revision, superseding the earlier nomination.
Key Functions of the 11th NFC
The 11th NFC will decide on the distribution of tax revenues across Pakistan. Under Clause 2 of Article 160, the NFC is responsible for dividing the net proceeds of:
- Income taxes (excluding federal salaries)
- Sales and purchase taxes on goods
- Export duties (cotton and others)
- Excise duties
- Other taxes specified by the president
Additionally, the NFC has been tasked with:
- Recommending grants-in-aid from the federation to provinces
- Reviewing borrowing powers of both Centre and provinces
- Determining financial responsibility for national projects such as dams, highways, and health programmes
- Allocating resources for Azad Jammu and Kashmir (AJK), Gilgit-Baltistan (GB), and merged districts of KP (ex-FATA)
Impact on Provinces and Centre
This updated framework suggests the federal government’s intention to:
- Push provinces to contribute toward natural calamities
- Share costs of trans-national projects (dams, highways, motorways)
- Replace population-based incentives with social sector performance-based criteria
- Strengthen local government activation
Why This Matters?
The 11th NFC Award will directly impact:
- Provincial budgets (education, healthcare, infrastructure)
- Disaster management funding
- Tax reforms and borrowing powers
- Balanced regional development
It also reflects a strategic shift from population-focused resource allocation toward a performance-based model.
- Link to related articles on Pakistan’s economic policies, provincial budgets, and flood management updates.
- Link to Dawn.com official report
- Link to Pakistan Constitution Article 160 (official law database)
Conclusion
The approval of Balochistan’s revised NFC nomination marks a significant step in shaping the future of Pakistan’s fiscal federalism. The 11th NFC Award 2025 is expected to redefine resource distribution, provincial empowerment, and financial responsibilities, setting the tone for equitable economic development across the country.
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