Pakistani finmin calls for reworking federal funding to provinces to reflect human development priorities

Pakistan’s Finance Minister Muhammad Aurangzeb speaks during an interview at his office in Islamabad, Pakistan on July 19, 2024. (Reuters/File)
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Updated 10 July 2025
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Pakistani finmin calls for reworking federal funding to provinces to reflect human development priorities

  • Muhammad Aurangzeb identifies climate change, population growth as ‘existential issues’
  • The minister calls for a ‘shift from infrastructure-heavy thinking to human capital investments’

ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb on Thursday called for a rethinking of how federal funds are allocated to provinces, arguing that future disbursements should reflect human development indicators instead of just population size.

Speaking at an event organized by the Ministry of National Health Services in connection with World Population Day in the federal capital, Aurangzeb said Pakistan’s rapid population growth posed a serious challenge and must be addressed through coordinated, long-term policy interventions.

“As we move forward with revisiting and reviewing the NFC [National Finance Commission] award, the current allocation driver must be reconsidered,” he said while addressing the gathering.

“There are broader factors, such as human development indicators, which should be incorporated,” he added. “These can help shape a revised formula for how we divvy up resources between the federation and the provinces.”

The NFC is a constitutional mechanism that determines how financial resources are distributed from the federal government to Pakistan’s provinces. The existing formula primarily weighs population, though there are several influential voices within the government demanding that future formulas consider a broader range of development metrics.

The finance minister also noted Pakistan must confront two “existential issues” — climate change and population growth — if it wants to reach its long-term goal of becoming a $3 trillion economy by 2047.

“Just think about it: 40 percent of children under the age of five in this country are stunted,” he said. “If we don’t address this, there is no sustainable path forward.”

Aurangzeb noted the issue extended beyond food and sanitation, pointing to the need for birth spacing, women’s education and family planning awareness.

He also emphasized the scale of available resources for addressing these challenges.

Referring to Pakistan’s recently signed 10-year Country Partnership Framework with the World Bank, he said the agreement includes $20 billion in financing, with $600–700 million annually earmarked for population-related measures.

“We have a lot of funds already at our disposal, provided we find the right places to invest and prioritize them correctly,” he said.

Aurangzeb also argued that Pakistan’s total development spending across federal and provincial budgets exceeds Rs 4.2 trillion ($14.7 billion).

“The issue isn’t funding,” he said. “We must shift from infrastructure-heavy thinking to human capital investments.”


Imran Khan’s party seeks ‘confidence-building measures’ after government’s talks offer

Updated 03 January 2026
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Imran Khan’s party seeks ‘confidence-building measures’ after government’s talks offer

  • PTI says access to jailed founding leader essential for talks to be considered credible
  • Government says it’s ready for dialogue but nothing will happen until Khan favors the idea

ISLAMABAD: Pakistan’s jailed former prime minister Imran Khan’s party said on Saturday it would only consider the government’s offer for talks credible if it is accompanied by “concrete confidence-building measures,” such as unhindered access to its founding leader in a high-security prison in Rawalpindi.

Last month, Prime Minister Shehbaz Sharif said the government was fully prepared to hold a dialogue with Khan’s Pakistan Tehreek-e-Insaf (PTI) party to address political polarization that has deepened since the downfall of the PTI administration in a parliamentary no-confidence vote in 2022.

PTI has frequently complained about a state crackdown against its top leadership, including Khan and his wife, who are serving prison sentences in multiple cases ranging from corruption charges to inciting violence against state institutions and attacks on government properties.

Sharif’s offer for talks came amid media reports that PTI wanted a dialogue with the government, though he noted that negotiations would not be allowed to proceed on the basis of “blackmailing” or unlawful demands and would only cater to legitimate issues.

“Announcements of talks, without concrete confidence-building measures, cannot be treated as credible progress,” Azhar Leghari, PTI’s central deputy information secretary, told Arab News.

He recalled that Khan had authorized Mahmood Khan Achakzai and Allama Raja Nasir Abbas to carry forward with the dialogue process, adding that talks “require trust, and trust cannot be built at the cost of constitutional rights or democratic legitimacy.”

“For dialogue to be meaningful, it is essential that these authorized representatives are allowed regular and unhindered access to Imran Khan so that any engagement accurately reflects his views and PTI’s collective position,” he added.

Khan’s family, party and legal team have complained in the past they are stopped by the authorities from meeting the ex-PM in prison. Last month, they also raised concerns about his health, prompting the officials to allow one of his sisters to meet him, who said he was fine.

Shortly thereafter, a scathing message was posted on his social media account, criticizing the army chief. Khan’s post elicited a bitter response from the government and the military amid accusations of inciting people against state institutions.

Leghari’s comments came only a day after Rana Sanaullah, adviser to Prime Minister Sharif on political affairs, said PTI’s “second- or third-tier leadership” wanted dialogue, but nothing was going to happen until Khan favored these negotiations.

He also maintained that while the government was ready for talks, “uncertainty and delays from PTI are preventing progress.”

Meanwhile, a newly formed National Dialogue Committee of former PTI leaders told Arab News it had organized a session on Wednesday, January 7, in the federal capital that will bring together all major political parties, journalists, lawyers and representatives of civil society.

“Our goal is to bring political leaders together so that, while discussing their own issues, they can collectively seek solutions to the nation’s challenges,” Mahmood Baqi Moulvi, a Pakistani politician and member of the committee, said.

“The initiative also builds on previous efforts, including a letter to the prime minister requesting confidence-building measures to enable talks with PTI,” he added.

The National Dialogue Committee had urged the government in the letter to grant parole to jailed party figures in Lahore, including former foreign minister Shah Mahmood Qureshi and Dr. Yasmin Rashid, describing the move as vital for building trust ahead of negotiations.

It had also maintained such a step “would not only create an extremely positive, conducive, and trust-filled environment for the negotiations but would also lay a strong foundation for restoring mutual confidence among all stakeholders.”

While the government has also offered dialogue in the past, PTI leaders have conditioned participation on substantive measures, including what they describe as an end to politically motivated prosecutions and arrests, restoration of fundamental rights, respect for judicial independence and a credible roadmap toward free and fair elections.

“Reconciliation is possible, but it must be based on correcting injustices rather than managing optics,” Leghari said. “A genuine reset requires restoring respect for the Constitution, ending political victimization and allowing democratic processes to function without interference.”

Rana Sanaullah and Deputy Law Minister Barrister Aqeel Malik did not respond to requests for comment.