President constitutes 11th National Finance Commission

August 22, 2025(MLN): The President of the Islamic Republic of Pakistan has formally constituted the 11th National Finance Commission (NFC), in accordance with Clause (1) of Article 160 of the Constitution, to review and recommend the distribution of financial resources between the Federation and the provinces.

The new NFC has been constituted with immediate effect, superseding the previous commission formed under Notification No. S.R.O. 635(1)/2020 dated July 21, 2020, which now stands dissolved.

confirmed by Khurram Schehzad, Advisor to Finance Minister Senator Muhammad Aurangzeb, via a post on X (formerly Twitter), stating that the commission has been constituted with immediate effect.

The Commission will be chaired by the Federal Minister for Finance and will include the finance ministers of all four provinces, along with nominated experts representing each province.

Composition of the 11th NFC

The commission comprises the following members:

Terms of Reference (ToRs)

The Commission has been tasked with making key recommendations to the President, including:

1.      Distribution of net proceeds of federal taxes between the Federation and Provinces.

2.      Grants-in-aid from the Federal Government to Provincial Governments.

3.      Exercise of borrowing powers by both federal and provincial governments.

4.      Cost-sharing mechanisms for financial expenses incurred by the Federation on subjects within the provinces’ jurisdiction.

5.      Sharing of financial burdens related to trans-provincial matters.

6.      Funding of national projects shared by the Federation and the provinces.

7.      Any other financial matters referred by the President.

The Finance Division will provide secretariat support to the Commission, as per the Rules of Business, 1973.

The 11th NFC was formed amid rising calls for stronger fiscal coordination between Islamabad and the provinces, seen as key to stabilizing the economy, advancing inclusive development, and improving the efficiency of public spending.

With growing demands for equitable resource allocation and transparency, the 11th NFC is expected to address longstanding concerns around financial autonomy and national project funding.

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