The NFC award came under sharp criticism in the National Assembly as Health Minister Mustafa Kamal described the current population-based distribution formula as “flawed.” He raised concerns during a budget debate for the fiscal year 2026–27.
Moreover, he argued that linking financial shares primarily to population size creates long-term structural imbalance. According to his remarks, the existing system does not adequately reflect development needs. As a result, the debate has reignited discussions on fiscal federalism in Pakistan.
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Mustafa Kamal NFC Award Population Formula
Health Minister Mustafa Kamal stated that the NFC award is approximately 82% based on population, which he termed a major structural flaw.
Furthermore, he questioned how provinces could improve their share under a system where population growth increases financial allocation. He specifically mentioned that smaller provinces like Balochistan receive lower shares due to population size. Consequently, he suggested that the system unintentionally rewards population increase rather than efficiency or development.
National Finance Commission NFC Award Debate
The NFC award is designed under the National Finance Commission framework to distribute federal revenues among provinces. Mustafa Kamal compared Pakistan’s system with other countries, claiming that population weightage is significantly lower elsewhere.
In addition, he said that other factors such as revenue generation, backwardness, and income levels should play a greater role. Therefore, he argued that a more balanced formula is needed to ensure equitable development across provinces.
Mustafa Kamal Population Growth Warning
During his speech, Mustafa Kamal warned that rapid population growth could severely strain national resources under the current NFC award structure.
Moreover, he stated that Pakistan may require thousands of new schools, hospitals, and millions of jobs if current trends continue. He questioned the country’s fiscal capacity to meet these demands. As a result, he emphasized the urgency of long-term population control policies.
NFC Award Policy Reform Proposal
Mustafa Kamal proposed introducing incentives—reportedly around 32%—for provinces that effectively control population growth under the NFC award system.
Additionally, he praised the removal of taxes on contraceptives, calling it a positive step toward reducing birth rates. He argued that such measures could help stabilize population growth and ease pressure on public services. Consequently, the discussion signals potential policy reform debates in future fiscal planning.
