Pakistan Nfc Award Reform Discussions Amidst Fiscal Challenges

On February 27, 2026, significant discussions continued regarding the National Finance Commission (NFC) Award, with Planning Minister Ahsan Iqbal advocating for reforms to address Pakistan's fiscal challenges. He highlighted that the federal government transfers approximately Rs 8.2 trillion to provinces from a total of Rs 19 trillion in revenue, retaining only Rs 11.07 trillion against expenditures nearing Rs 17.5 trillion. Iqbal emphasized, "Nearly 50 percent of federal expenditure goes toward debt servicing and approximately 25 percent toward defence," indicating a pressing need for a recalibrated NFC formula that incentivizes poverty reduction and sustainable development. Punjab's Senior Minister Mariyum Aurangzeb supported the idea of sharing defense costs, stating, "Debt and defence are real issues, and the Centre and the provinces should work together to address them," although this proposal faced opposition from Sindh and Khyber Pakhtunkhwa, who preferred adherence to constitutional frameworks and expanding the revenue pool instead of reallocating shares.