Finance Minister Muhammad Aurangzeb has signaled that the government may review the National Finance Commission (NFC) Award’s population based resource distribution formula, saying the current mechanism is no longer sustainable and should be reconsidered as part of broader structural reforms.
Speaking at a World Population Day seminar, Aurangzeb said population growth and climate change are Pakistan’s two biggest long term challenges. He noted that 82 percent of the NFC Award allocation is currently based on population, adding that the formula will need to be reviewed when discussions on the next NFC Award move forward.
The NFC Award is the constitutional mechanism that determines how tax revenues collected by the federal government are distributed between the federation and provinces, as well as among the provinces.
The current formula, introduced under the Seventh NFC Award in 2009, allocates resources using multiple indicators, including population, poverty, revenue generation, and inverse population density, with population carrying the highest weight.
The finance minister said the government has already taken some immediate steps, including abolishing sales tax on contraceptives in the federal budget, but stressed that lasting progress requires structural reforms, measurable targets, and regular monitoring under the National Population Council.
Aurangzeb also cited Bangladesh, Indonesia, and Iran as examples of countries that successfully slowed population growth through girls’ education, greater female workforce participation, and the involvement of religious scholars.
He added that Pakistan will have access to $600 million to $700 million annually under the World Bank’s 10 year Country Partnership Framework to support population related initiatives, including reducing child stunting and learning poverty.
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