Iqra Umar, Advocate High Court
The delay in the announcement of a new National Finance Commission (NFC) Award since the implementation of the seventh award in 2009 has raised profound constitutional, administrative, and fiscal concerns across Pakistan. Constitutionally mandated under Article 160, the NFC Award is intended to be revised every five years to recalibrate the distribution of financial resources between the federal government and the provinces. However, over a decade has passed without any substantive progress, exposing deep fissures in the country’s fiscal federalism.
Several intricate and interwoven factors contribute to this prolonged hiatus. Foremost among them is the chronic political instability and the persistent trust deficit between the federation and provincial governments. In the absence of a coherent national consensus, successive administrations have failed to convene productive NFC sessions. This inertia has undermined not only intergovernmental relations but also the credibility of the constitutional process itself.
Furthermore, the Federal Board of Revenue’s consistent underperformance in revenue collection has significantly constrained the federal government’s fiscal space. With diminishing financial inflows, the centre exhibits growing reluctance to reallocate a substantial share of resources to the provinces a move that would, under a new NFC formula, likely reduce federal discretion even further.
Interprovincial discord also plays a pivotal role. Provinces remain divided over the parameters for revenue sharing, such as population size, poverty ratio, backwardness index, and revenue generation capacity. Disagreements over the authenticity and implications of recent population censuses have further exacerbated tensions. This lack of harmony hampers the formation of a mutually acceptable framework.
Additionally, the federal government bears significant culpability due to its apparent administrative inertia. While it is constitutionally obliged to initiate and steer the NFC process, successive governments have either delayed the constitution of the commission or failed to prioritize its deliberations. This abdication of responsibility not only violates the spirit of federalism but also weakens the financial autonomy of the provinces.
External shocks, including the COVID-19 pandemic and subsequent economic downturn, have also provided a convenient — albeit temporary — justification for postponement. However, using crises as pretexts only underscores the state’s broader institutional frailty.
In essence, while both federal and provincial actors contribute to the deadlock, the primary burden of responsibility lies with the federation. The failure to operationalize a new NFC Award reflects an alarming erosion of constitutional governance and impedes equitable development across the nation. It is imperative that this constitutional obligation is treated not as a political inconvenience but as a foundational pillar of Pakistan’s federal structure.
