Mustafa Kamal calls population-based NFC formula a major flaw

ISLAMABAD: Health Minister Mustafa Kamal has criticised the National Finance Commission award formula, arguing that its heavy reliance on population creates an unfair basis for distributing resources among the provinces.

Speaking in the National Assembly on Tuesday during the budget debate for fiscal year 2026-27, Kamal said the existing formula was 82 per cent tied to population size. He argued that such a structure discouraged provinces from pursuing population control because a lower population could translate into a smaller financial share.

Referring to the impact on smaller provinces, Kamal said Balochistan, being the least populous province, received the lowest allocation under the formula. He said this exposed what he described as the system’s biggest weakness, since a province seeking a larger share would effectively benefit from a bigger population rather than other indicators of need or performance.

The minister also drew a comparison with a neighbouring country, without naming it, and said population carried only 17 per cent weight in that country’s equivalent resource-sharing formula. According to Kamal, the remaining share there was determined through factors including revenue, backwardness, income and other considerations.