The document discusses Pakistan's National Finance Commission (NFC), which constitutionally reviews the formula for distributing funds between the federal and provincial governments every five years. It outlines the NFC's composition and functions, describes some of the funding formulas and allocations from previous NFC awards in 1970, 1979, 1991, and 1997, and discusses factors considered in the 2009 NFC award such as population, development levels, and security issues. The 2009 award aimed to more equitably resolve disputes around fund distribution that had persisted since Pakistan's independence.

1. SAIRA MUMTAZ
MPA IV
PUBLIC ADMINISTRATION IN PAKISTAN

2. NATIONAL FINANCE COMMISSION
 Article 160 of the constitution of Pakistan
says,
 In every five years the president shall
constitute a National Finance Commission.
 This National Finance Commission will
review the formula for the distribution of
funds

3. Composition of NFC.
 Minister of finance of the Federal
Government
 Ministers of Finance of the Provincial
Government.
 And such other persons as may be appointed
by the President after consultation with the
Governors of the Provinces.

4. Functions of National Finance
Commission:
 The distribution of funds between the
Federation and the Provinces of the net
proceeds of the taxes.
 The making of grants-in-aid by the Federal
Government to the Provincial Governments.
 The exercise by the Federal Government and
the Provincial Governments of the borrowing
powers.
 Any other matter relating to finance referred
to the Commission by the President

5.  Formula based NFC distribution
 Under the systematic basis there are four
stages.
 firstly, revenue sharing occurs at federal and
provincial government
 secondly, from provincial government to
local government.
 Thirdly, from federal to local government.
 lastly from local to local government

6.  The resources transfer includes,
 revenue shares, grants and loans.
 provinces are also assigned collection of
minor tax.
 Further all non-tax receipts are levied and
retained by Federal government.

7.  A committee was set up under the Federal
Finance Minister on April 1970.
 Out of the provincial share 54 percent was
given to East Pakistan,
 46 percent was distributed among the rest of
the provinces.
 Provincial Share in the 1970 Award Punjab
Sindh KPK Baluchistan 56.50% 23.50% 15.50%
4.50% respectively.

8.  NFC Award given by the elected government
of late Z.A.Bhutto.

9.  The NFC Award 1979
 Punjab had 57.97%
 Sindh has 23.34%
 KPK has 13.39%
 Baluchistan has 5.30%.

10.  1991 – NFC Award given by PML government,
Nawaz Sharif as PM

11.  1997 – NFC Award was announced by a
caretaker government of Farooq Ahmed
Leghari.

12.  Population was used as the sole factor.
 Punjab which has biggest population.
 smaller provinces are backward in many
areas.
 literacy rate, social development, employment
opportunities, education, health, infrastructure, peace
and security.
 Baluchistan is the largest province, covering
40 per cent of the total area of the country.

13.  The KPK, on the other hand, points out the
problems of Afghan refugees and the
internally-displaced persons (IDPs).
 ongoing war against religious extremism and
terrorism.
 The Sindh government demands the return of
the right to collection of GST

14.  A very important and welcome development
was the approval of 7th National Finance.

15.  Independence to 2009 there was many issues
in distributing the funds.
 From all these issues in 2009 they have used
4 point formula.
 Here we can say that this award proved to be
problem solving. Now to some extent issues
has been resolved.