Explanation

The NFC Award is enacted through mathematical formulation between federal government and provincial governments.

History of distribution of revenue between Center and Provinces in the subcontinent dates back to Government of India Act 1935. Pakistan came into existence on 14th august 1947. After the creation of the country, first award of distribution of revenue was announced in 1952 popularly known as Raismen award. It distributed the revenue between the center and provinces of the federation of Pakistan. Third constitution of Pakistan was passed in 1973 and was effected on 14th August 1974. Article 160 (1) of the constitution of the country provides for the establishment of the National Finance Commission (NFC). Article 160 (2) of the constitution provides: