Provinces oppose cut in NFC share as KP demands 5% raise

Khyber Pakhtunkhwa also seeks inclusion of former FATA in seventh NFC, increase in anti-terror funds: Next meeting will be held in January: Sindh CM Murad says meeting was held in pleasant environment: KP CM’s adviser says point of views of all provinces were listened to

Published: 08:41 AM, 4 Dec, 2025
Business, Featured News
Provinces oppose cut in NFC share as KP demands 5% raise
Caption: Participants of the inaugural meeting of 11th NFC in a group photo.

The inaugural meeting of the 11th National Finance Commission (NFC) was concluded in Islamabad on Thursday with two provinces opposing any reduction in the award while Khyber Pakhtunkhwa demanded a hefty five percent raise in its share, reported 24NewsHD TV channel.

During the meeting chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, the Khyber Pakhtunkhwa demanded the federal government to also include erstwhile FATA in the seventh National Finance Commission (NFC).

Sources told the 24News TV channel that at the maiden meeting of the 11th NFC, which was held at the Ministry of Finance, the KP also demanded that its share in the resources meant to combat terror be also multiplied from one percent to three percent.

Besides that, it also demanded that its share be increased by five percent; from 14.62 per cent to 19.62 percent.

The province also demanded the resolution of the issues concerning article 161 of the constitution, sources said, adding that another demand made by the province was to amend the excise duty formula levied on petroleum products.

Apart from that, they disclosed, KP also demanded that the decision to levy excise duty on gas should also be revisited.

Sources elaborated that KP also urged the Centre to resolve the issues concerning windfall levy.

Moreover, the province asked the federal government to devise a monthly schedule for the NFC meetings.

Speaking on the occasion, the finance minister thanked the chief ministers of Sindh and KP, provincial ministers for finance, secretaries and other members for showing up, and expressed the hope that the provinces would get along with each other nicely.

He further said that today’s meeting was a constitutional duty and an opportunity to promote cooperation. 

“The present forum had been set up under Article 150 of the constitution,” Aurangzeb said, adding that the 10th NFC Award had completed its term on July 21, 2025. Hence, the significance of today’s meeting has increased manifolds.

The minister said it was the federal government’s desire to convene the first meeting of the 11th NFC as early as possible. “The prime minister himself took deep interest in the matter and ensured that the meeting is held at the earliest,” he informed.

He recalled that earlier the meeting had to be postponed due to devastating floods in Punjab, KP and Sindh.

“The only way to allay the concerns concerning the NFC Awrad is to hold talks with sincerity,” Aurangzeb said, adding that today the participants are seated together without any prejudices.

“Our first priority is to listen to each other. The Center is here to listen to the grievances and viewpoints of the federating units,” the minister asserted.

The fact, he went on to say, that the provinces had inked the National Fiscal Pact was indeed very encouraging.

He also praised the provinces for their cooperation in ensuing the implementation of the International Monetary Fund (IMF) programme.

He noted that despite the fact that this year, the country faced aggression by India and devastating floods, still it stood firm like a rock.

The minister said that such constructive talks would continue in future as well.

The second meeting will be held in the second week of January.

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.

Chief ministers of Sindh and Khyber Pakhtunkhwa holding the finance portfolio attended the meeting. KP CM Sohail Afridi led a heavy delegation.

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 repeatedly deferred. 

Speaking to media men after the meeting, Sindh Chief Minister Syed Murad Ali Shah said that the meeting was held in a cordial atmosphere. “Provinces shared with the Center their financial condition,” he said, adding the Center too shared with the provinces its financial condition.

“A decision has been taken at the meeting to form sub-groups,” the chief minister informed.

Speaking to newsmen following the meeting, Adviser to KP CM on Finance Muzammil Aslam said that the meeting was held in a pleasant environment. “No pressure was exerted on any party; point of views of all four provinces were listened to.”

He also said that there was no talk of reduction in the shares of provinces, and everybody agreed to get along with each other nicely.

Muzammil said that several groups would be formed, which would settle different matters. “One working group will be formed on erstwhile FATA, which will decide how it will be included in the financial structure,” he explained.

 
Reporter Waqas Azeem

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