29 Lecture - National Finance Commission

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29 Lecture

MGT111

Midterm & Final Term Short Notes

National Finance Commission

The National Finance Commission is a constitutional body in Pakistan that is responsible for distributing the net proceeds of taxes among the provinces. Established in 1950, it consists of nine members and submits its recommendations to the Pres


Important Mcq's
Midterm & Finalterm Prepration
Past papers included

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  1. Which article of the Constitution of Pakistan deals with the National Finance Commission? A) Article 158 B) Article 160 C) Article 161 D) Article 162 Answer: B) Article 160

  2. How many members are there in the National Finance Commission of Pakistan? A) 5 B) 7 C) 9 D) 11 Answer: C) 9

  3. When was the National Finance Commission of Pakistan established? A) 1947 B) 1950 C) 1973 D) 1985 Answer: B) 1950

  4. What is the main function of the National Finance Commission? A) To distribute the net proceeds of taxes among the provinces B) To regulate the budget of the federal government C) To oversee the operations of the State Bank of Pakistan D) To set monetary policy for the country Answer: A) To distribute the net proceeds of taxes among the provinces

  5. How often does the National Finance Commission of Pakistan submit its recommendations to the President of Pakistan? A) Every year B) Every two years C) Every three years D) Every four years Answer: C) Every three years

  6. Which is the latest National Finance Commission Award in Pakistan? A) 6th NFC Award B) 7th NFC Award C) 8th NFC Award D) 9th NFC Award Answer: C) 8th NFC Award

  7. Which province receives the largest share of the divisible pool under the 8th NFC Award? A) Punjab B) Sindh C) Khyber Pakhtunkhwa D) Balochistan Answer: A) Punjab

  8. Which of the following is not a criterion for the distribution of resources under the NFC Award? A) Population B) Poverty level C) Revenue generation D) Area of the province Answer: D) Area of the province

  9. Who is the current Chairman of the National Finance Commission of Pakistan? A) Asad Umar B) Hammad Azhar C) Dr. Abdul Hafeez Shaikh D) Dr. Ishrat Hussain Answer: C) Dr. Abdul Hafeez Shaikh

  10. Which of the following taxes is not included in the divisible pool under the NFC Award? A) Income tax B) Sales tax C) Customs duty D) Excise duty Answer: C) Customs duty



Subjective Short Notes
Midterm & Finalterm Prepration
Past papers included

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  1. What is the National Finance Commission (NFC)? Answer: The National Finance Commission is a constitutional body in Pakistan that is responsible for distributing federal resources among the provinces.

  2. When was the NFC established? Answer: The NFC was established in 1951 under the provision of the Government of India Act, 1935.

  3. Who heads the NFC? Answer: The NFC is chaired by the Federal Minister of Finance and includes the provincial finance ministers as members.

  4. How often does the NFC meet? Answer: The NFC is required to meet at least once a year.

  5. What is the main function of the NFC? Answer: The main function of the NFC is to distribute federal resources among the provinces in a fair and equitable manner.

  6. How is the NFC formula determined? Answer: The NFC formula is determined through a consensus among the federal and provincial governments, with inputs from technical experts.

  7. What factors are considered in the NFC formula? Answer: The NFC formula takes into account population, poverty, revenue generation, and other socio-economic indicators.

  8. How are the NFC awards distributed among the provinces? Answer: The NFC awards are distributed among the provinces based on their share in the formula.

  9. Can the NFC formula be changed? Answer: Yes, the NFC formula can be revised by consensus among the federal and provincial governments.

  10. How important is the NFC for inter-provincial harmony? Answer: The NFC is critical for inter-provincial harmony as it ensures that resources are distributed fairly and equitably among all provinces, which helps reduce inter-provincial disparities and promote economic growth and development.

The National Finance Commission (NFC) is a constitutional body in Pakistan that plays a pivotal role in the country's federal fiscal framework. It is responsible for distributing federal resources among the provinces in a fair and equitable manner. The NFC is chaired by the Federal Minister of Finance and includes the provincial finance ministers as members. The NFC meets at least once a year to determine the NFC formula, which is used to distribute federal resources among the provinces. The NFC formula takes into account population, poverty, revenue generation, and other socio-economic indicators. The formula is determined through a consensus among the federal and provincial governments, with inputs from technical experts. The NFC awards are distributed among the provinces based on their share in the formula. The NFC is critical for inter-provincial harmony as it ensures that resources are distributed fairly and equitably among all provinces, which helps reduce inter-provincial disparities and promote economic growth and development. The NFC also provides a platform for dialogue and cooperation among the federal and provincial governments on fiscal matters. The NFC formula can be revised by consensus among the federal and provincial governments, which allows for adjustments to be made based on changing circumstances and needs. The NFC has undergone several revisions over the years to ensure that it remains relevant and effective. In conclusion, the NFC is an important institution in Pakistan's federal fiscal framework that plays a critical role in promoting inter-provincial harmony and economic growth. Its fair and equitable distribution of resources among the provinces is essential for reducing inter-provincial disparities and ensuring the overall development of the country.

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