EDITORIAL: Warnings that population size should no longer determine provincial shares under the National Finance Commission need to be taken very seriously, especially when they emerge from a parliamentary forum examining health, employment and long-term development pressures. During its recent deliberations, the Senate Standing Committee on National Health Services drew attention to a contradiction embedded in Pakistan’s fiscal framework, one that has shaped economic outcomes over decades. The country continues to distribute resources in a manner that expands population counts even as unemployment rises, human development indicators weaken, and public services come under growing strain.
At the core of the problem lies the NFC formula itself. By treating population size as the dominant criterion for resource allocation, the state has turned headcount into a fiscal asset rather than a development liability. Provinces are incentivised to grow numbers, not outcomes. There is little reward for investing in human capital, slowing population growth or improving productivity when larger populations automatically translate into larger fiscal shares. This logic may appear neutral on paper, but in practice it has institutionalised demographic irresponsibility.
The economic consequences are no longer abstract. Pakistan already has one of the largest populations in the world and one of the highest population growth rates, despite being geographically small and resource-constrained. Unlike continental-scale countries that sit high on global population rankings, Pakistan does not have the land, water, fiscal space or institutional capacity to absorb unchecked growth. Every additional million added without parallel gains in education, skills, and health deepens pressure on jobs, housing, food systems and public finances.
The youth bulge illustrates the danger clearly. Demography does not become a dividend by default. A rapidly expanding young population without jobs, skills, or health coverage is a delayed crisis. Labour markets are already struggling to absorb existing cohorts, and future generations will face even harsher conditions if population growth continues to outpace job creation and productivity gains. Poverty, malnutrition, and child stunting are direct outcomes of this trajectory, not peripheral concerns.
What makes the situation more troubling is policy paralysis. Task forces exist on paper but do not function. The Pakistan Demographic and Health Survey has not been conducted since 2017, leaving policymakers to operate without current data on fertility, maternal health and nutrition. Devolution is repeatedly cited as an explanation for inaction, yet coordination mechanisms are neither empowered nor enforced. Responsibility drifts between federal and provincial tiers until accountability disappears.
Political convenience also plays a decisive role. Population policy remains socially uncomfortable and politically risky. Religious and cultural sensitivities are invoked to justify silence, not to design solutions that respect social contexts while addressing material realities. This avoidance compounds every other economic challenge the country faces.
There is also fiscal hypocrisy at work. Provinces argue that resources are insufficient to meet development needs, yet resist reforms that would reduce long-term pressure on those same resources. A funding system that rewards population growth while complaining about fiscal stress is internally inconsistent. It shifts the burden forward, leaving future administrations to manage consequences that were entirely foreseeable.
The committee’s recommendation to revisit population as an NFC criterion therefore deserves serious consideration, though not blind endorsement. Removing population size without replacing it with credible alternatives would create new distortions. Reform must be paired with incentives for human development and sustainability, using metrics tied to health outcomes, education attainment, productivity, women’s participation and poverty reduction.
This is not a debate about technical formulas. It is a choice about whether Pakistan continues to plan for growth it cannot absorb. As long as fiscal incentives remain misaligned, population policy will remain marginal and economic planning will continue to fail. Population policy delayed is economic policy sabotaged.
Copyright Business Recorder, 2026
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