Islamabad: The federal government has established eight specialized committees to prepare for the 11th National Finance Commission (NFC) Award, aimed at ensuring a fair and transparent distribution of resources between the federal and provincial governments. The committees, functioning as working groups, have been tasked with examining different aspects of fiscal allocation and providing recommendations to facilitate the upcoming award.
According to sources, the formation of these committees is part of a structured process following the first NFC meeting held on December 4, where the federal and provincial governments agreed on creating dedicated working groups to address various financial and administrative issues.
Key Working Groups and Their Responsibilities
- Provincial Expenditure Working Group:
This group has been formed to examine expenditures under provincial jurisdiction. It will be led by the Finance Minister of Punjab and will focus on ensuring that provinces receive adequate funds to meet their developmental and administrative responsibilities. - Resource Distribution Working Group:
Tasked with evaluating the distribution ratio of federal and provincial resources, this group will be headed by the Finance Minister of Balochistan. It will analyze equitable mechanisms to allocate financial resources across provinces. - National Debt Structure Working Group:
A separate group has been established to assess the structure and utilization of national debt, ensuring debt management aligns with fiscal sustainability. - Tax-to-GDP Ratio Working Group:
This group aims to improve the tax-to-GDP ratio and will be chaired by the Finance Minister of Khyber Pakhtunkhwa. Recommendations from this group will help strengthen revenue generation and fiscal management. - Direct Transfers to Provinces Working Group:
To streamline the process of transferring funds directly to provinces, a working group led by the Finance Minister of Sindh has been formed. This group will ensure timely and transparent fund transfers to provincial governments. - Merged Districts (Former FATA) Integration Working Group:
Considering the integration of the former Federally Administered Tribal Areas (FATA), this committee will review and recommend resource allocations for these regions under the NFC framework. - Divisible Pool Working Group:
A committee, chaired by Finance Minister Mohammad Aurangzeb, has been tasked with reviewing the structure of the divisible pool, which is a critical component for equitable distribution of federal revenue among the provinces. - Other Resource Allocation and Financial Management Working Groups:
Additional groups have been established to cover miscellaneous financial matters and ensure a comprehensive review of all aspects related to the NFC Award.
Next Steps
The second NFC meeting is expected to take place by mid-January, during which the working groups will present their recommendations within their respective jurisdictions. These proposals will play a crucial role in shaping the 11th NFC Award, aiming to balance fiscal responsibilities and resource distribution between the federation and provinces.
