Pakistan Health Minister Mustafa Kamal criticized the National Finance Commission (NFC) award distribution formula as flawed during a National Assembly debate on Tuesday [1].

The dispute centers on how federal funds are allocated to provinces. If the formula continues to prioritize population size, provinces that implement successful family planning and population control measures may see a decrease in their shared revenue [1, 2].

Kamal spoke during the assembly's debate on the federal budget for the 2026-27 fiscal year [1]. He said that the current NFC formula is 82% population-based [1]. This weighting means that the majority of the financial award is determined by the number of people living in a province rather than other metrics of need or performance [1].

Kamal questioned the logic of a system that creates a financial disincentive for public health goals. "What province will reduce its income by controlling the population?" Kamal said [1].

The minister's comments highlight a tension between national health objectives and provincial fiscal interests. While the federal government may seek to lower birth rates to ensure economic stability, the current funding mechanism rewards provinces with higher population growth with more money [1, 2].

In response to these concerns, the government has begun consulting with provinces to discuss amending the formula [2]. A government spokesperson said the planning ministry has submitted reform recommendations that propose providing incentives for provinces that successfully curb population growth [2].

These proposed reforms aim to decouple revenue distribution from raw population numbers to ensure that health successes do not result in budgetary penalties [2].

“"The NFC formula is 82 per cent population‑based."”

The current NFC formula creates a systemic contradiction where the financial rewards of the state conflict with the public health goals of the government. By tying 82% of funding to population, the system effectively subsidizes population growth, potentially undermining national efforts to stabilize demographics for economic sustainability.