President Alvi reconstitutes NFC

ISLAMABAD: President Dr Arif Alvi has reconstituted the ninth National Finance Commission (NFC) to formulate a new resource distribution formula between the Centre and federating units.

The Finance Division has notified the new 10-member Commission. Finance Minister Asad Umar will be the chairman of NFC which will comprise the four provincial finance ministers.

The Commission will reach an agreement on the eighth Award which is likely to alter both the inter-provincial and center-provinces resource sharing arrangement as the new population census and the merger of Fata warrants revision of the current resource sharing formula.

The NFC Award is a constitutional obligation. It is clearly indicated in the Article 160 of the “Constitution of Islamic Republic of Pakistan, 1973” that it has been made mandatory for the government to compose NFC Award at an interval extending not more than five years for the amicable resource distribution
among the federation and its respective units.

Provinces then also re-distribute revenues among lower tiers of the government through a revenue-sharing formula through PFC Awards.

The central government collects most of the revenues and then redistribute vertically between the federal and the provincial governments, and horizontally among the provinces.

Provinces then also redistribute revenues among lower tiers of the government, through a revenue-sharing formula known as Provincial Finance Commission (PFC).