By Digital Spartans 
The World Bank has called on Pakistan to reform its fiscal resource distribution framework, urging the government to reduce unnecessary federal spending and introduce a new National Finance Commission (NFC) Award to improve economic management and strengthen public finances.
The recommendation comes as Pakistan continues to face fiscal challenges, with policymakers seeking ways to improve revenue collection, manage public expenditure, and ensure sustainable economic growth. According to the World Bank, revisiting the country’s financial distribution mechanism could help create a more efficient and balanced fiscal system.
Speaking on the issue, Bolorma Amgaabazar said Pakistan’s existing framework for distributing financial resources between the federal and provincial governments requires significant reforms. She emphasized that updating the NFC Award would support better fiscal governance and improve the allocation of public resources.
The National Finance Commission Award determines how tax revenues collected by the federal government are shared among Pakistan’s provinces and the federation. It plays a central role in financing public services, development projects, and administrative functions at both the federal and provincial levels.
According to the World Bank, reducing non-essential federal expenditures while improving the distribution of financial resources could help strengthen Pakistan’s overall fiscal position. Efficient public spending, combined with a modernized revenue-sharing framework, would allow governments at all levels to utilize resources more effectively.
The organization also believes that fiscal reforms can contribute to greater transparency, accountability, and long-term economic stability. A revised NFC Award could help align financial allocations with current economic realities, demographic changes, and development priorities across the country.
Calls for updating the NFC framework have gained attention in recent years as Pakistan works to address budget deficits, rising debt obligations, and increasing demands for public investment in infrastructure, education, healthcare, and social welfare.
While any changes to the NFC Award would require consensus among the federal government and all provincial governments, the World Bank’s recommendations highlight the importance of reviewing Pakistan’s fiscal architecture to ensure sustainable economic management and stronger public finances in the years ahead.