The use of elements like poverty and inverse population
density as indicators in the distribution formula is based on the fact that some provinces lag behind others in the level of development.
Under the seventh NFC award the greatest weight (82pc) in horizontal distribution is given to population followed by poverty and backwardness (10.3pc), revenue generation (5pc) and Inverse Population
population 82 percent, poverty/backwardness 10.30 percent, revenue collection/generation 5 percent and inverse population
density 2.70 percent.
Since 1973, it is the first time when the distribution of resources among provinces is based not only on the population but also on other criteria such as backwardness, inverse population
density, and revenue collection/generation.
According to the multiple indicators' formula revenue sharing between the provinces would be made accordingly, 82 percent on the basis of population, 10.3 percent on the basis of poverty and backwardness, 5 percent on the basis of revenue collection and generation and 2.7 percent would be on the basis of inverse population
At present, for horizontal distribution of divisible pool taxes among the provinces under the National Finance Commission (NFC) 82pc weight is assigned to population, 10.3pc to poverty and backwardness, and 2.7pc to inverse population
At present, Centre gets 42.5% from the divisible pool and the rest is distributed among the provinces on the basis of multiple criteria of population, revenue generation, inverse population
density and poverty.
Highlighting the resource transfer to the provinces, he said that under the 7th NFC Award gave due weightage to poverty/backwardness, revenue collection, revenue generation and inverse population
density, in addition to population.
According to the multiple indicators formula, population would determine 82 percent of the revenue sharing, poverty and backwardness10.3 percent, revenue collection and generation 5 percent and inverse population
density 2.7 percent.
The remaining 18% is distributed on the basis of poverty and backwardness 10.3%, inverse population
density 2.7% and revenue collection and generation 5%.
The multiple indicators and their respective weights in the 7th NFC award are as follows: population 82pc, poverty/backwardness 10.3pc, revenue collection/generation 5pc, and inverse population
ISLAMABAD -- The 7th National Finance Commission (NFC) Award was path-breaking last year as it moved away from population as the sole basis for horizontal distribution of resource and gave due weightage to population, poverty/backwardness, revenue collection, revenue generation and inverse population