The policy brief argues that the 7th NFC Award is not the primary driver of Pakistan’s higher federal deficit. While it shifted less than 1% of GDP to provinces compared to DRGO 2006, the deficit widened mainly due to surging current expenditures. FBR’s revenue shortfall had only a minor impact, affecting provinces more than the center. Crucially, the Award directed more resources to backward provinces, supporting socio‑economic development and SDGs. Addressing fiscal pressures requires controlling expenditures and mobilizing revenues, rather than scaling back provincial transfers.
