The national stability of Pakistan depends upon the fair resources distribution and an effective administrative structure. The National Finance Commission (NFC) Award has always remained a sensitive political issue due to its outdated formulas of resources distribution. Similarly, the problems of most of the districts of Pakistan remained unaddressed due to the weak administrative structure. Together, these lead the economic instability and regional disparities in Pakistan.  The debates on these issues raise the question: whether the reforms in the National Finance Commission (NFC) Award and expansion of district-level administration serve as catalysts to the stability of Pakistan?

The existing indicators of the National Finance Commission (NFC) Award, mainly population, create inequality between the provinces. Historically, population is the core indicator in determining provincial shares of federal revenue. This always underlines the drawbacks. Due to the primary focus on population, authorities overlook the other essential indicators. Even though the higher per capita cost of development, still the financial needs of the Provinces with less population, for instance, Balochistan, are under-prioritized. This led to the instability in Pakistan.  A balanced and equitable distribution of resources cannot be made by giving the largest weight to population.

The existing formula of the National Finance Commission (NFC) Award has failed to address the regional socioeconomic disparities. The allocation of the NFC Award primarily focuses on the population, neglecting the welfare and livelihood concerns. Though in the previous NFC Award, the share of provinces has been increased. Yet the updated indicators, for instance, backwardness, climate vulnerability, security expenditures, and poverty density, remained unaddressed. Khyber Pakhtunkhwa (KP) gets a smaller share from NFC Award as compared to Punjab despite the fact that KP has been dealing the attacks of terrorist organizations for decades.

An updated NFC Award, while strengthening Provincial Finance Commissions (PFCs) can bring stability. The existing PFCs destroy the essence of the 18^th Amendment, which the decentralization in Provinces. Provincial authorities often withhold the funds. Which resulted in the ineffective passed down of allocated funds to provinces, to grassroots administration. In addition to this, they intentionally delay the local elections, which led to the weak administration. Empowered local government has failed to deliver essential services efficiently. The government loses the trust of the citizens, and this ultimately leads to great political instability.

An updated NFC Award cannot bring stability while neglecting the administrative reforms. To ensure the fair distribution of resources, the creation of new districts becomes mandatory. In the large districts, the funds remain in the hands of higher authorities. This led to the misuse of funds within the oversized districts. In addition to this, centralization of resources in urban areas is not isolated to the financial challenges. But also reduces accountability, weakens monitoring and persistent delays in development projects. As a result, a province, despite having a larger share in NFC Award, cannot ensure the stability and development among the citizens.

Smaller administrative units assist in effective regulation. When it comes to regulations, in addition to the distribution of resources, smaller administrative units become effective. In the large districts, the lower communities often failed to bring the attention of authorities to their issues. Opportunities often designed for the elite and lower class remain unattained. In small districts, authorities can respond to citizen complaints faster. For instance, despite the fact that Lahore is one of the most developed cities in Punjab, most development has remained isolated in central Lahore, neglecting the Andoorn Lahore in terms of infrastructure, sanitation and basic services. This imbalance of resources shows that a large district cannot bring stability.

In a larger district, the local representation remains absent. Marginalized communities cannot have a stronger political voice. This weakens democratic participation and increases feelings of exclusion, ultimately contributing to long-term instability. When districts are divided into manageable sizes, it enhances public access to services such as health facilities, education departments, access to courts, and administrative offices become accessible to all, particularly for the rural community, who often face challenges in centralized governance. To bring the stability through effective administration, the large-sized districts become paralyzed. This only creates the centralization of power and resources in a few hands without the distribution among others.

The following final thoughts emphasize that the existing formula of the National Finance Commission (NFC) Award and administrative structure have failed to bring stability. An urgent need to update the NFC Award, in which other indicators, such as poverty intensity and security costs, should be considered. In the updated NFC Award, new census data should be used. While ensuring the transparency in Provincial Finance Commission (PFCs) through the updated NFC Award can bring real improvements and stability. To ensure that allocated funds are passed down to the local authorities, the larger districts must be divided into smaller administrative units. The establishment of an independent monitory body must be observed to ensure that NFC awards are used efficiently.