The federal government is considering a financial arrangement based on the principles of the National Finance Commission (NFC) to provide Gilgit-Baltistan with a more predictable share of national resources. Federal Minister for Law and Justice Senator Azam Nazeer Tarar said consultations were under way regarding the constitutional and legal status of Gilgit-Baltistan, while the government was also examining options that could strengthen the region’s financial position. The proposed approach comes amid longstanding demands from successive Gilgit-Baltistan governments for a formal share in the NFC Award.
At present, the federal government provides annual financial grants to Gilgit-Baltistan, but the regional government has repeatedly sought a more structured mechanism for receiving federal resources. Senator Tarar said broad consultations would be conducted on the future administrative and constitutional arrangement of the region, with relevant stakeholders expected to participate in the process. He also invited Gilgit-Baltistan Chief Minister Amjad Hussain Advocate and Leader of the Opposition Hafiz Hafeezur Rehman to the next meeting of the Gilgit-Baltistan Issues Working Group.
The working group meeting, chaired by Senator Tarar, brought together officials from Gilgit-Baltistan as well as representatives of the ministries of defence, foreign affairs, and Kashmir Affairs and Gilgit-Baltistan and members of the Gilgit-Baltistan Council. The meeting reviewed constitutional, legal, financial and administrative matters concerning the region. Participants also examined earlier reports, possible constitutional options and proposals aimed at improving Gilgit-Baltistan’s financial resources, while considering reforms that could be implemented within the existing governance framework.
Senator Tarar directed the working group to develop practical proposals and prepare an interim report containing recommendations for consideration by the main committee. He said additional time would be needed to reach an agreed constitutional and legal solution for Gilgit-Baltistan, emphasising that a national consensus would be important for any long-term arrangement. He also highlighted the need to protect the rights of people in the region and ensure that they have a sense of equality within the broader national framework.
Meanwhile, the Gilgit-Baltistan Assembly has unanimously approved a proposed financial agreement between the federal and regional governments based on the financial arrangement currently applicable between the federal government and Azad Jammu and Kashmir. Chief Minister Amjad Hussain Advocate presented the proposal before the assembly after the Gilgit-Baltistan cabinet had already approved it. The proposal is intended to provide an interim mechanism for addressing the region’s financial requirements while discussions continue over its constitutional position and potential inclusion in the NFC framework.
According to the chief minister, the Gilgit-Baltistan government had approached the federal government for assistance in dealing with its budget deficit. A committee constituted by the Prime Minister’s Office subsequently examined options for giving the region a share based on NFC principles. However, the federal Finance Division raised an objection that Gilgit-Baltistan could become a member of the NFC only after a constitutional amendment because the region is not currently recognised as a constitutional part of Pakistan.
As a result, the Finance Division suggested that a formal NFC arrangement could not be established until the necessary constitutional changes were made. In the interim, it proposed that Gilgit-Baltistan could adopt a financial arrangement similar to the one in place for Azad Jammu and Kashmir, provided the proposal received approval from the Gilgit-Baltistan Assembly and was subsequently adopted by the federal government. The proposed arrangement would remain applicable until Gilgit-Baltistan becomes a constitutional part of Pakistan and is formally included in the NFC.
Chief Minister Amjad Hussain said Gilgit-Baltistan is facing a financial shortfall of around Rs17 billion against an estimated requirement of Rs320 billion. Under the proposed agreement, the federal government would provide Rs250 billion to the region. He said the arrangement could help address immediate financial requirements, improve the region’s overall fiscal position and provide greater stability. He also stressed that the AJK-style mechanism should remain linked to the eventual constitutional amendment and inclusion of Gilgit-Baltistan in the NFC.
The discussion over a longer-term NFC-based framework follows a meeting between Chief Minister Amjad Hussain and Prime Minister Shehbaz Sharif in July, shortly after the chief minister assumed office. During the meeting, the chief minister sought a greater financial share for Gilgit-Baltistan. An official said the prime minister subsequently formed a high-level committee headed by Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal to examine major financial, governance and development matters affecting the region.
The committee has reviewed several areas connected with Gilgit-Baltistan’s long-term financial sustainability, including hydropower development, reforms in the power sector, climate resilience, digital connectivity, public service delivery and development priorities. A major focus of its work is the development of a transparent resource-sharing mechanism based on NFC principles. Such a framework could provide Gilgit-Baltistan with more predictable fiscal transfers while addressing its financial requirements within the broader constitutional and legal discussions currently under way.
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