ISLAMABAD, Nov 7 (INP-Wealth Pakistan): Pakistan’s fiscal model has become unsustainable and requires urgent, consensus-driven reform to ensure fair development and stronger national unity. This was the central message of a high-level webinar titled “Unlocking Pakistan’s Financial Future: The Power of the NFC,” organized by the Pakistan Economics Frontier (PEF).
The session featured leading economists and policymakers, including Dr Muhammad Sabir (Principal Economist, SPDC), Dr Vaqar Ahmad (Economist and President-elect, Rotary Pakistan Corporate), Sana Ullah Baloch (Former Senator), and Lehaz Ali (Journalist).
Call for a Performance-Based NFC Framework
Experts agreed that the existing population-based NFC formula has outlived its relevance. They said the system creates inefficiencies and fails to address deep development gaps among provinces.
The participants proposed a performance-based framework that ties fiscal transfers to measurable progress in poverty reduction, human development, and environmental outcomes.
They recommended the inclusion of multi-dimensional indicators such as inequality, revenue generation, health, education, and climate resilience. This would help move beyond the outdated population count and promote better governance across all provinces.
Rewarding Performance and Accountability
Dr Vaqar Ahmad stressed that reforming the NFC Award is both an economic and national priority.
“A performance-oriented NFC is not just an economic necessity but a strategic tool to strengthen national unity,” he said.
He added that the federal government must expand the resource base, provinces should raise their own revenues, and local governments need greater financial autonomy to improve public service delivery.
Addressing Regional Inequalities
Sana Ullah Baloch highlighted that the current formula widens regional disparities.
“A revised mechanism should consider factors like area, infrastructure deficit, and development potential,” he said.
According to him, integrating Balochistan and other lagging areas into the national mainstream requires an inclusive and fair distribution model.
Ensuring Transparency and Technical Rigor
Speakers urged that transparency and data-based decision-making be central to the next NFC Award. They recommended depoliticising the process through independent experts and robust datasets to build public trust.
They also underlined that empowering local governments through larger fiscal allocations is key to effective service delivery and a stronger citizen-state relationship.
About Pakistan Economics Frontier (PEF)
The Pakistan Economics Frontier is an independent think tank promoting evidence-based policy dialogue on Pakistan’s economic and development challenges. It continues to facilitate national discussions on fiscal reforms, social inclusion, and sustainable growth.