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Fiscal Equalisation among Provinces in the NFC Awards


  • Aisha Ghaus-Pasha

    (Institute of Public Policy)

  • Hafiz A. Pasha

    (School of Social Sciences)

  • Asma Zubair

    (Beaconhouse National University, Lahore)


This paper constructs a Fiscal Equalisation Index (FEI) to calculate the extent of fiscal equalisation among the provinces achieved in various NFC awards. The results show that the process of fiscal equalisation had largely broken down prior to the 2009 NFC award, following the ad hoc arrangements announced in 2006. Earlier awards have, however, been fiscally equalising in character, primarily through special grants and inclusion of new straight transfers. According to the FEI, although the highest level of fiscal equalisation was achieved following the 1990 NFC award, the largest improvement in the index has been with the 2009 NFC award, which has introduced an element of fiscal equalisation in the divisible pool transfers for the first time.

Suggested Citation

  • Aisha Ghaus-Pasha & Hafiz A. Pasha & Asma Zubair, 2010. "Fiscal Equalisation among Provinces in the NFC Awards," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 563-576.
  • Handle: RePEc:pid:journl:v:49:y:2010:i:4:p:563-576

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