PAKISTAN today stands at a critical moment where national cohesion, constitutional responsibility and fiscal justice must be reassessed in the light of changing regional realities and emerging strategic challenges. Among the most important questions resurfacing is whether Azad Jammu & Kashmir (AJK) and Gilgit-Baltistan (GB) should finally be included in Pakistan’s National Finance Commission (NFC) Award. This debate is no longer merely constitutional or administrative; it reflects Pakistan’s broader vision of federalism, national integration and equitable development. A fundamental question is increasingly being asked: can regions that stand at the frontline of Pakistan’s defense, water security, strategic depth and ideological identity continue to remain outside the country’s formal fiscal-sharing mechanism?
The discussion has gained renewed attention as voices from the federal level advocate a more inclusive national economic framework. For decades, AJK and GB have played a central role in Pakistan’s security and regional stability, yet they continue to rely largely on limited grants and irregular financial arrangements instead of a structured share in national resources. If there is one political leader in Pakistan’s contemporary history who consistently viewed underdeveloped and strategically sensitive regions as national responsibilities deserving equal attention, it is Nawaz Sharif. His political approach emphasized bringing neglected areas into the national mainstream through infrastructure, connectivity and economic integration.
The proposal to include AJK and GB in the NFC Award aligns closely with that broader vision. Nawaz Sharif repeatedly stressed that regions contributing immensely to Pakistan’s defense, the Kashmir cause, water resources, border security and the China-Pakistan Economic Corridor (CPEC) should also receive a rightful share in federal revenues. Such a move would improve infrastructure, public services, employment opportunities and long-term economic stability in these regions. Pakistan’s current political and military leadership also appears committed to carrying this vision forward. Shehbaz Sharif, Ishaq Dar and Syed Asim Munir have repeatedly reaffirmed Pakistan’s support for the Kashmiri people and emphasized the socio-economic development of AJK and GB. The present leadership understands that Pakistan’s ideological and geographical security remains closely tied to Kashmir and the people living in these strategically sensitive territories.
The NFC Award, established under Pakistan’s 1973 Constitution, serves as the backbone of the country’s fiscal federalism. It determines how financial resources are distributed between the federation and the provinces. While the formula initially relied mainly on population, it later evolved to include poverty, backwardness, revenue generation and territorial size to ensure greater fairness among less-developed regions. Despite their undeniable strategic importance, however, AJK and GB remain outside this framework. This exclusion increasingly appears inconsistent with ground realities. These regions form Pakistan’s most sensitive strategic frontier. On one side lies the Line of Control, while on the other stand borders connected to China, India and Central Asia. Gilgit-Baltistan is the gateway to CPEC, while AJK remains politically and symbolically linked to the Kashmir dispute.
At the same time, the economic and geographical challenges faced by these territories are far more complex than those in many other parts of Pakistan. Rugged mountainous terrain, limited industrialization, natural disasters, severe weather conditions and constant border tensions substantially increase development costs. Traditional federal grants alone are no longer sufficient to meet growing public needs. Critics of the proposal often raise constitutional objections, arguing that since AJK and GB are not constitutionally recognized as provinces, they cannot formally become part of the NFC Award. Yet, in practical terms, Pakistan already assumes responsibility for defense, foreign affairs, trade, currency and many administrative functions relating to these regions. Major infrastructure and energy projects are also financed through federal resources. Under such circumstances, creating a transparent fiscal mechanism for these territories should not be viewed as constitutionally impossible.
Another concern occasionally raised is that inclusion in the NFC framework could affect Pakistan’s diplomatic position on Kashmir or provide India grounds to intensify allegations regarding the “integration” of disputed territories. In reality, the issue here is not annexation but economic justice and sustainable development for millions of people living in these areas. United Nations resolutions on Kashmir do not require depriving these populations of their socio-economic rights. What Pakistan needs, therefore, is a balanced and innovative constitutional approach. One possible option could be granting AJK and GB a “special territorial share” within the NFC mechanism instead of a conventional provincial allocation. Another approach could involve linking federal development grants to a transparent NFC-based formula. A dedicated “National Frontier and Kashmir Development Fund” may also help address the long-term economic needs of these strategically vital territories.
It must also be acknowledged that national security cannot be sustained through military preparedness alone. Roads, schools, hospitals, economic opportunity and social justice are equally important pillars of a stable state. If Pakistan fails to economically empower these regions, frustration and political alienation may eventually create vulnerabilities that hostile external forces could attempt to exploit. The time has come to move beyond symbolic slogans and temporary political statements. AJK and GB must become an integral part of Pakistan’s broader fiscal and developmental planning. Regions that safeguard Pakistan’s ideological frontiers, water resources, strategic interests and the Kashmir cause deserve a meaningful share in national resources. Strong borders are ultimately protected not only by military posts, but by empowered, satisfied and prosperous people.
—The writer is a Supreme Court lawyer and former member & Chairman Standing Committee of Azad Jammu and Kashmir Council. Islamabad
