THE CASE FOR AN ADAPTIVE FISCAL FEDERALISM: An Evidence-Driven Recalibration of the NFC Baseline

This paper underscores the importance of updating the baseline data underpinning Pakistan’s 7th NFC Award, which currently relies on outdated census figures and administrative boundaries. To more accurately reflect recent demographic and fiscal developments, it recommends a technical recalibration using updated indicators while maintaining the existing formula. As deliberations for the 11th NFC Award are underway, the paper presents a pragmatic interim solution for the 2026–27 budget by applying refreshed baseline data to guide resource distribution.