Pakistan today stands at a critical crossroads where national cohesion, constitutional responsibility, and fiscal justice must be revisited in light of evolving regional realities and emerging strategic challenges. The country’s changing geopolitical and economic landscape has revived several long-standing questions that were once overshadowed by political expediency, constitutional ambiguities, and international sensitivities. Among them, one of the most significant is the proposed inclusion of Azad Jammu & Kashmir and Gilgit-Baltistan in the National Finance Commission (NFC) Award.In recent months, voices emerging from the federal level have given renewed momentum to this debate.
The question being raised is both legitimate and unavoidable: should 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? This is not merely a matter of financial distribution; it reflects Pakistan’s broader vision of federalism, national integration, and state priorities.If there is one political leader in Pakistan’s contemporary history who has consistently viewed all federating units not merely as geographical entities but as national responsibilities deserving equal attention and development, it is Nawaz Sharif.
Nawaz Sharif remains one of the few statesmen in Pakistan who speaks less but thinks and delivers more through practical policymaking. A defining feature of his political approach has been his emphasis on integrating underdeveloped and strategically sensitive regions into the national mainstream.The discussion regarding the inclusion of Azad Jammu & Kashmir and Gilgit-Baltistan in the NFC Award is, in many ways, an extension of that broader national vision. It was Nawaz Sharif who first highlighted the need to ensure that regions which have played an extraordinary role in Pakistan’s defense, water security, the China-Pakistan Economic Corridor (CPEC), border protection, and the Kashmir cause should also receive a rightful share in federal revenues. Such a step, he argued, would help provide the people of these regions with better infrastructure, employment opportunities, public services, and economic uplift.It is equally important to note that Pakistan’s current political and military leadership 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’s right to self-determination and emphasized the importance of the socio-economic development of Azad Jammu & Kashmir and Gilgit-Baltistan. The current leadership understands that Pakistan’s ideological and geographical security remains intrinsically linked with Kashmir, and that the people of these regions — who have consistently stood by Pakistan through every challenge — cannot remain excluded from the national development framework.The NFC Award is fundamentally the backbone of Pakistan’s fiscal federalism. Established under the 1973 Constitution, it determines the distribution of financial resources between the federation and the provinces. Initially based primarily on population, the formula later evolved to include factors such as poverty, backwardness, revenue generation, and territorial size in order to ensure greater equity among less-developed regions. Yet, despite their undeniable strategic importance, Azad Jammu & Kashmir and Gilgit-Baltistan have remained outside this framework.
This exclusion appears increasingly inconsistent with ground realities. These regions are not ordinary territories; they constitute Pakistan’s most sensitive strategic frontier. On one side lies the volatile Line of Control, while on the other stand borders connected to China, India, and Central Asia. Gilgit-Baltistan serves as the gateway to CPEC, while Azad Jammu & Kashmir remains the political and symbolic center of the Kashmir dispute. If these regions continue to face developmental challenges under limited financial arrangements, the resulting sense of deprivation may gradually weaken both regional confidence and national cohesion.Moreover, the economic and geographical difficulties of these territories are far more complex than those faced by many other parts of Pakistan. Rugged mountainous terrain, limited industrialization, harsh climatic conditions, natural disasters, and permanent border tensions substantially increase development costs. Traditional federal grants alone are no longer sufficient to address their growing needs. If Pakistan genuinely seeks a balanced and inclusive federation, these regions must be incorporated into long-term fiscal planning.Opponents of this proposal often raise constitutional objections, arguing that since Azad Jammu & Kashmir and Gilgit-Baltistan are not constitutionally recognized as provinces of Pakistan, they cannot formally become part of the NFC Award. On the surface, this may appear to be a legally sound argument. However, when viewed within a broader national and practical context, the objection becomes less absolute. Pakistan already assumes responsibility for defense, foreign affairs, currency, trade, and numerous administrative functions relating to these regions. Major infrastructure, energy, and connectivity projects are also financed through federal resources. Under such circumstances, creating a transparent and structured 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 with an excuse to intensify allegations regarding the “integration” of disputed territories. In reality, however, the world already recognizes that Azad Jammu & Kashmir and Gilgit-Baltistan remain economically and strategically linked with Pakistan. The issue here is not annexation, but economic justice and sustainable development for millions of people living in these regions. United Nations resolutions on Kashmir do not require depriving these populations of their socio-economic rights.What is needed, therefore, is a balanced, pragmatic, and constitutionally innovative approach. One possible option could be granting Azad Jammu & Kashmir and Gilgit-Baltistan a “special territorial share” within the NFC mechanism rather than a conventional provincial allocation. Alternatively, federal development grants could be tied to a transparent NFC-linked formula. Another possibility may involve the creation of a dedicated “National Frontier and Kashmir Development Fund” aimed specifically at addressing the long-term economic requirements of these strategically vital territories.It must also be acknowledged that national security cannot be sustained through military preparedness alone. Roads, schools, hospitals, economic opportunities, and social justice are equally important pillars of a stable state. If Pakistan fails to economically empower these regions, growing frustration and political alienation could eventually create vulnerabilities that hostile external forces may attempt to exploit.The time has come to move beyond symbolic slogans and temporary political statements.
Azad Jammu & Kashmir and Gilgit-Baltistan 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 dignified and meaningful share in national resources. Strong borders are ultimately protected not only by military posts, but by empowered, satisfied, and prosperous people.Looking ahead, Pakistan may also need to initiate a serious national dialogue on another important issue: providing the people of Azad Jammu & Kashmir and Gilgit-Baltistan with some form of temporary or permanent representation in Pakistan’s federal parliament until the realization of the Kashmiri people’s right to self-determination in accordance with United Nations resolutions and the aspirations of the Kashmiri people. As these regions continue to contribute to Pakistan’s economy, defense, and national security, it is increasingly reasonable to ask whether their people should eventually have a voice in institutions such as the Senate of Pakistan and the National Assembly of Pakistan. Various international models of provisional representation exist for disputed or semi-autonomous territories. Pakistan, too, can explore a balanced constitutional arrangement that strengthens both national integration and the historic bond between Pakistan and the people of Jammu & Kashmir.
