The NFC Award remains central to Pakistan’s fiscal debate as new talks begin in Islamabad. The first meeting stayed calm and avoided any proposal to cut provincial shares. However, analysts warn the Centre may still push new financial burdens on provinces. As a result, the NFC Award debate has again raised concerns about fiscal balance.
Meanwhile, the federal government expects provinces to sharply increase tax collection. It wants higher taxes on services, property, and farm income. At the same time, the Centre plans to raise its own tax-to-GDP ratio. Therefore, financial pressure is rising across the federation.
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Provincial leaders have strongly resisted greater central control. PPP chairman Bilawal Bhutto urged transferring sales tax on goods to provinces. He said provinces collect taxes more efficiently after the 18th Amendment. Thus, he described centralized taxation as inefficient and damaging.
Economists argue that blaming the NFC Award hides deeper federal spending issues. They note that federal expenses keep rising despite reform claims. Experts also recall Pakistan’s fiscal crisis existed before the 7th NFC Award. Hence, poor spending control remains the real problem.
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Policy experts now call for improving the NFC Award instead of rolling it back. They suggest rewarding efficiency, revenue generation, and poverty reduction. They also support stronger provincial roles in welfare and development. Ultimately, analysts say protecting the NFC Award is vital for federal stability.