Planning Minister Ahsan Iqbal admitted that the provinces’ 57.5% share in the National Finance Commission (NFC) award remains “untouchable” due to fierce opposition from federating units. At the conclusion of the Pakistan Governance Conference, a clear rift emerged: Punjab signaled a willingness to help the Centre by sharing the massive burden of debt and defense spending, while Sindh and Khyber Pakhtunkhwa (K-P) adamantly refused to bypass constitutional limits.
Consensus evolving on giving money to GB and AJK from NFC!
Planning Minister Ahsan Iqbal conceded on Thursday that the provincial National Finance Commission (NFC) share of 57.5% was untouchable due to reservations by the federating units, as Punjab’s readiness to share defence…
— Shahbaz Rana (@81ShahbazRana) February 27, 2026
Punjab Senior Minister Marriyum Aurangzeb repeatedly emphasized that the provinces should co-manage the costs of defense and debt, which currently consume nearly 60% of the national budget. However, K-P and Sindh argued that the federal government’s fiscal crisis stems from its own failure to collect taxes. Officials from K-P pointed out that the Federal Board of Revenue (FBR) has fallen short of tax-to-GDP targets for 15 years, while provincial revenue collections have far outpaced federal efforts.
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To provide the Centre some relief without altering the 57.5% formula, the Planning Ministry proposed making separate allocations for Azad Jammu & Kashmir, Gilgit-Baltistan, and Islamabad within the next award. This move could save the federal government approximately Rs 500 billion annually. Despite this, the stalemate continues as K-P and Sindh demand that the Centre stop spending on devolved subjects, like social safety nets, and focus instead on increasing the overall size of the national revenue pie.
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