Health Minister Calls Pakistan's NFC Award Formula 'Flawed'

Health Minister Mustafa Kamal has sharply criticized Pakistan's National Finance Commission (NFC) award formula, deeming it "flawed" for its heavy reliance on population size for fund distribution among provinces. Speaking during a debate on the federal budget for fiscal year 2026-27 in the National Assembly, Kamal highlighted that 82 percent of the NFC award is population-based.

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What province will reduce its income by controlling the population?

Kamal questioned the logic of incentivizing population growth, asking, "What province will reduce its income by controlling the population?" He pointed out that Balochistan, the smallest province by population, receives the lowest share. "If it wants to get [a larger] share like Punjab, it will have to increase its population," he remarked, emphasizing that population-based distribution is the "biggest flaw" in the current system.

Drawing a comparison without naming a specific country, the minister noted that in a "neighboring country," population weightage in their finance commission award is only 17 percent. The remaining allocation in that system, he explained, is based on factors such as revenue generation, backwardness, and income levels.

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Balochistan is the smallest province [population wise] and gets the lowest share [in the NFC]. If it wants to get [a larger] share like Punjab, it will have to increase its population.

Kamal's remarks underscore a long-standing debate in Pakistan regarding the equitable distribution of financial resources among its provinces. The current formula, designed to allocate federal revenues, has often been a point of contention, with critics arguing it does not adequately account for the diverse economic needs and capacities of different regions.

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In our neighbouring country, the weightage of population in the NFC award is 17pc, while the rest was based on revenue, backwardness, income and other areas.