Finance Minister Muhammad Aurangzeb on Thursday told the inaugural meeting of the 11th National Finance Commission (NFC) that the Centre was there to listen to the stance of the provinces.
State broadcaster PTV shared images from the meeting on social media platform X, which showed Aurangzeb greeting Sindh Chief Minister Murad Ali Shah and Khyber Pakhtunkhwa Chief Minister Sohail Afridi.
It said that the meeting was being held at the Finance Division. The meeting is still underway.
According to a handout issued by the finance ministry, he made the comments in his opening remarks. The minister is chairing the meeting as negotiations for the sharing of federal divisible resources between the Centre and the provinces formally begin.
The press release said that at the outset of the meeting, the minister stressed that it had provided an opportunity for mutual cooperation, upholding constitutional responsibility.
He noted that the forum was established under Article 150 of the Constitution, adding that the 10th NFC Award had expired in July this year.
“In this context, the importance of this meeting increases further,” he said. He said that the federal government was of the view that the 11th NFC meeting be convened “without any delay”.
He noted that Prime Minister Shehbaz Sharif himself had stated that he wanted to hold the meeting as soon as possible.
“The provinces had also expressed their determination to fulfil this constitutional responsibility,” he said. The minister added that, however, it had to be postponed due to floods in Punjab, Khyber Pakhtunkhwa and Sindh.
He further said that the best solution for speculations and concerns regarding the NFC was a “sincere and transparent” dialogue.
“We are here today with an open mind and without any prejudice,” he said, stressing that “our first priority is to listen to each other.” He assured the participants that the federal government was “here to listen to them”.
The minister voiced optimism that the provinces “will move forward within the spirit of cooperation.”
He noted that the “signing of the National Fiscal Pact by the provinces was very significant.”
It is a “testament to our shared commitment and ability to work together in the national interest,” the finance minister said.
He appreciated the cooperation of provinces in “achieving the required surpluses and ensuring the implementation of the IMF programme”.
The finance minister recalled that the country faced “unprecedented threats” this year, citing the May conflict with India and recent floods.
“In these difficult times, we stood united as a strong federation,” he said, calling for the “same spirit” in the 11th NFC Award process.
“The role of the NFC is fundamental for the equitable distribution of resources, fiscal stability and sustainable economic growth in the country,” Aurangzeb said.
He noted that the forum provided an “opportunity to bring together the best minds and advance the process of shared thinking and mutual learning”.
He hoped that the discussions would continue in the upcoming weeks, and urged members to “move forward with full commitment”.
“We will listen to each other and move forward with a spirit of unity, cooperation and mutual respect,” the minister said.
“Our goal is to successfully conclude the 11th NFC Award process,” the minister said.
The meeting will take up three agenda items. The four provincial finance ministers and four non-statutory members — Dr Asad Sayeed (Sindh), Mehfooz Ali Khan (Balochistan), Nasir Mehmood Khosa (Punjab) and Dr Musharraf Rasool Cyan (Khyber Pakhtunkhwa) — are members of the NFC.
At the outset, the meeting will hold general discussions on the “strategy for deliberations on the 11th NFC Award, including proposed formation of sub-groups for deliberations on thematic areas, etc”.
This will be followed by 10-minute presentations by each of the four provincial governments and the federal Ministry of Finance on their respective fiscal positions. The meeting will then set the schedule and timelines for future NFC meetings, most likely to be held in all federal and provincial capitals until the conclusion of deliberations.
The 11th NFC was constituted on August 22 to give a new award for sharing federal divisible resources between the Centre and the provinces. Its first meeting, initially called for August 27, was postponed repeatedly.
The terms of reference, set under Clause 2 of Article 160, require the 11th NFC to distribute between the federal government and the provinces the net proceeds of five major tax categories. These include taxes on income — including capital value tax and corporation tax but excluding taxes on income consisting of remuneration paid out of the Federal Consolidated Fund.
KP CM holds consultations ahead of NFC
Ahead of the meeting, KP CM Afridi last night held consultations in preparation for the inaugural meeting in the presence of senior PTI leadership, where it was decided to “fully and effectively” uphold KP’s interests, with a special emphasis on the “financial merger of former federally administered tribal areas (Fata).”
Detailing the meeting in a post on X, the government of KP said that Afridi was briefed that Fata was “entitled to Rs1,375 billion,” adding that the funds had not yet been provided.
During the meeting, the chief minister was briefed that “at the time of the merger of the former Fata, a promise was made to provide Rs100bn annually, which now amounts to Rs700bn”.
It was further discussed that out of the total amount, the Centre had only released Rs168bn, while Rs531.9bn remained pending.
CM Afridi termed the delay in the issuance of funds a “violation of Article 160” of the Constitution, vowing to protect the province’s “financial and constitutional rights”.
The participants of the meeting included PTI’s Asad Qaiser, provincial minister Meena Khan Afridi, Finance Adviser Muzammil Aslam and others.
