Health Minister Mustafa Kamal said the National Finance Commission (NFC) award distribution formula is flawed during a National Assembly debate on Tuesday.
The dispute centers on how federal funds are allocated to provinces. Because the current system heavily weights population, critics argue it creates a financial disincentive for regional governments to implement effective family planning and population control measures.
Speaking in Islamabad during the debate on the federal budget for fiscal year 2026‑27 [2], Kamal said the current formula is 82% based on population [1]. He said this structure is unfair to provinces that manage to curb their growth rates.
"What province will reduce its income by controlling the population?" Kamal said.
In response to these concerns, the federal government has begun consulting with provinces to amend the formula. The government is proposing new incentives for provinces that successfully reduce population growth, moving away from a system that primarily rewards larger populations.
The NFC award is the primary mechanism for distributing shareable financial resources between the federal government and the provinces. Under the current 82% population-based weight [1], provinces with higher birth rates receive a larger portion of the national revenue pool, a dynamic Kamal said contradicts public health goals.
“"What province will reduce its income by controlling the population?"”
This shift suggests a move toward 'performance-based' fiscal federalism in Pakistan. By decoupling funding from raw population counts, the government aims to align financial incentives with public health outcomes, effectively turning the national budget into a tool for population management.
