The Article 160 of the constitution prescribes the formation of National Finance Commission (NFC) to manage economic distribution between federal government and provinces. The economic resources are disbursed through a divisible pool. The president of Pakistan has constituted the 10^th finance commission for the above stated purpose.

However, its composition and agenda items have disturbed the champions of provincial autonomy and federalism. The commission comprises of eleven members, including five statutory and six non-statutory members. With regard to the non-statutory members, there is an apprehension that they are non-elected, and are included in the body without following the procedural obligations of the constitution. The nomination of non-statutory members requires the president to consult the governors of the provinces. The 10^th NFC notification does not indicate any such consultation on part of the president.

Another apprehension is vis-à-vis the additional agenda items i.e. the sharing of expenditure by provinces incurred on security, public debt, funds for former FATA/AJK/GB, subsidies and loss incurred by state owned enterprises (SOEs). The needs for placing these additional items on NFC agenda arises in the wake of financial crunch faced by the federation.

The federal government wants the provinces to share some of its financial burden. Herein, it is pertinent to ask the federation to tight its belt before expecting the provinces to share its miseries. The underlying reason of financial crunch faced by the federation lies in the fact that it had not raised its tax-to-GDP ratio which is still around 10 per cent. Besides, the federation has up till now retained some of the devolved ministries and departments. Thus, the remedy of the federation woes lie not in constraining the provinces’ fiscal space but increasing its tax generation capacity, adopting austerity measures and giving up the structures of ministries that have been devolved under the 18^th amendment.