The Constitution of Pakistan, 1973, is more than a legal document—it is the collective promise of how the nation chooses to resolve its biggest challenges that affect its stability and growth. Article 160, which created the National Finance Commission (NFC), was crafted with statescraft foresight. It was not meant to be simply an accounting exercise, but a meaningful political settlement of competing interests and a blueprint for fiscal fairness and equalisation—designed to balance the needs of both larger and smaller provinces, tax-rich and tax-poor regions alike. At its heart, the NFC is meant to correct the vertical and horizontal imbalances of tax and expenditure assignments and achieve a robust fiscal federalism. Its formula is not just about dividing money; it is about creating fairness, spurring growth, and ensuring resources reach the villages and towns where people actually live, beyond just the well-understood urban centres of the country.
In a nod to its farsightedness, the framers of the Constitution ensured that the formula could evolve, adapt, and respond to the country’s changing needs. Both good intentions and well-written preambles or articles in our foundational document are unfortunately not always enough. What we have seen in recent years is a slow drift into stasis of the NFC, despite it being a robust enough mechanism to move things forward. Commissions are formed but seldom meet; formulas remain frozen while realities on the ground change. The Tenth NFC, which expired in July 2025, stands out as a particularly stark example: it met once in five years and achieved nothing of substance. Like its predecessor, it left untouched the Seventh NFC Award of 2009—a formula that was long overdue for revision. For sixteen years we have not let our NFC work as intended. During this time our GDP doubled and the population increased by 40%, but the number of new NFC Awards went down to 0%.
This stagnation has real consequences. After the 2018 merger of FATA into Khyber Pakhtunkhwa (KP), the NFC was constitutionally required to update its formula to include the 5.5 million new citizens of Pakistan on an immediate basis. But that never happened. For seven years, KP has been underfunded by an estimated PKR 1,370 billion, money that should have gone into schools, hospitals, roads, and local governance in the Merged Districts to start correcting the neglect of the FATA of historic proportions. Instead, a major share of these funds flowed to the larger and tax-rich provinces under an outdated formula that no longer even complies with the Constitution. The deprivation is stark.
The NFC is not just about numbers; it is the keystone of Pakistan’s federal architecture. If it continues to fail, the promise of equal citizenship under the Constitution remains hollow for millions
In the decade under the Seventh Award, per capita public expenditure in FATA was barely half of what citizens of Balochistan received—PKR 25,571 per capita in FATA compared with PKR 44,236 per capita in Balochistan. Since the merger, the gap has widened, fuelling feelings of neglect in a region where peace and development depend heavily on visible state investments in rapid order. The special fiscal tool created by KP—the Accelerated Implementation Plan—has tried to fill the gap, but has itself been starved of funds: only PKR 168 billion received from the Federal Government out of a planned PKR 600 billion. That’s 72% less than intended. Imagine the feelings of disenchantment when a promise slowly diminishes into a low-activity farce.
This is not a debate about abstractions. It is about constitutional fidelity, about whether Pakistan’s fiscal federalism still serves all its citizens equally. Whether those resident on the peripheries of the periphery have equivalent rights, or some citizens are more equal than others. When the NFC remains frozen, it does not just paralyse priority programmes like consolidating peace and building up of FATA; it risks eroding the political settlements that underpin the federation itself.
The Seventh NFC Award was once hailed for broadening the formula beyond population, adding expenditure needs and other fairness criteria. But even its innovations were blunted by counter-equalisation measures that favoured tax-base-rich provinces. Today, those weaknesses are magnified by the failure to include all of KP in the formula. Seven extensions of the old award since 2018, through Presidential Orders, have only deepened the perception that fiscal federalism is being run on autopilot with partial regard to the constitutional provisions woven into the intent and great hope of Article 160.
In 2018, the whole country celebrated Pakistan righting a historical wrong by writing into the Constitution that the people of former FATA were the same as everyone else as they merged into KP. But in the seven years since, the NFC Award has not acknowledged the change in the Constitution by recognising these new citizens of KP. Seven years of silence have turned a moment of national pride into a case study in neglect. The merger was written into law, but the NFC’s continued omission in the formula has written exclusion into practice. The 11th NFC now carries an immense responsibility. Its first task is not just technical; it is constitutional. It must immediately revise the formula to bring KP and its Merged Districts fully into the fold. Doing so will not only correct a glaring constitutional violation; it will restore faith in the NFC as a living, functioning institution capable of adapting to Pakistan’s evolving realities.
The stakes could not be higher. The NFC is not just about numbers; it is the keystone of Pakistan’s federal architecture. If it continues to fail, the promise of equal citizenship under the Constitution remains hollow for millions. But if it succeeds, it can unlock new investments, renew trust, and demonstrate that Pakistan’s institutions are capable of delivering fairness where it matters most: in the lives of its people.
The NFC must correct this injustice without further stasis, or risk undermining Pakistan’s federal covenant. Pakistan has incredible external security challenges, which all of us experienced this year; in securing our borders, we would do well to strengthen our internal. It is very valuable to continually emphasise the esoteric provisions of the Constitution. Even more important is finally getting to a stage where the constitutional mechanisms are seen by the people to work for the promise for which they were enshrined in the foundational law.