The 11th National Finance Commission held its inaugural meeting in Islamabad, agreeing to establish multiple working groups to drive forward the next NFC Award. Finance Minister Mohammad Aurangzeb chaired the session, which brought together the chief ministers and finance ministers of Sindh, KP, Punjab and Balochistan.

Federal and provincial representatives briefed the forum on their respective financial positions, with participants underscoring the need for transparency and cooperative engagement.

Aurangzeb said the NFC is a key constitutional platform under Article 150, adding that devastating floods in Punjab, KP and Sindh had delayed the session. He urged members to listen to each other and maintain fair, unbiased discussions to safeguard the country's financial stability.

The minister praised provinces for signing the National Fiscal Pact and supporting surpluses and IMF programme compliance. He said recent crises, including floods and external pressures, had reinforced the need for a unified federal approach to fiscal management. He called for sustained, substantive discussions over the coming months to finalise the 11th NFC Award.

New Resource Proposals, 2 Point 5 Percent Security Deduction Under Study

Sources said six to seven working groups would be constituted, including one dedicated to former FATA matters. The next NFC meeting is planned for January 8 or 15, 2026, to review progress. Sindh Chief Minister Murad Ali Shah confirmed the decision to form these groups to accelerate technical deliberations.

The Planning Ministry also placed two fresh resource allocation proposals before the prime minister. One recommends a 2 point 5 percent deduction from divisible revenues for security, armed forces and regional grants, leaving provinces with 57 point 5 percent and the federal government with 42 point 5 percent.

The second proposal suggests deducting Benazir Income Support Programme and Higher Education Commission costs before the vertical distribution, a formula that could increase federal resources by 11 to 12 percent by 2030. Officials said the next NFC formula may assign greater weight to factors such as revenue generation, fertility rates and forest cover, in addition to population.

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