Progressing on the 10th NFC Award The big fall in the share of Punjab may mitigate against the process of arriving at a consensus on the 10 th NFC Award. The largest Province had already accepted a significant drop in its share in relation to its population share in the 7 th NFC Award. The recommendations given below include proposals for changing the horizontal sharing formula to accommodate a somewhat larger share for Punjab. 7.4. Arriving at a Consensus The recommendations given below are likely to facilitate the finalization of the Award by the 10 th NFC. i) The vertical share of the Provincial Governments will, of course, remain unchanged at 57.5 percent as in the last Award. ii) The cost of collection of divisible pool taxes should continue at 1 percent of the revenues. iii) There is a case for withdrawing the initial share of 1 percent to Khyber-Pakhtunkhwa for the War on Terror. First, the situation has improved, and there are fewer acts of terror. Second, the internally displaced persons from FATA are now part of the popu­lation of the Province and the horizontal share has been adjusted accordingly. iv) The horizontal sharing formula could be modified in the following ways: a) Instead of the shares according to the Population Census of 2017 being used, reliance may be placed on the shares in the Population Census of 1998. This practice of taking the previous Census shares have been adopted by the Indian Finance Commission in its 15 th Award. The motivation is to prevent a motivation for expansion in population and encourage population planning. In Pakistan’s case, it will protect somewhat the shares of the two larger Provinces who have shown a lower population growth rate from 1998 to 2017. b) Another option is to take the 2017 population shares but increase the weight of population in the horizontal sharing of formula. c) Another option is for the poverty/ backwardness criteria to be based not on the incidence of poverty as percentage of the population but on the number of poor. v) There is need to incorporate in the Award items(d) to(h) in the TOR of the 10 th NFC to the extent possible. This is feasible since the projections indicate that if the pro­jected size of transfers to the Provincial Governments is realized then they will have significant a cash surplus. The surplus is projected at 0.6 percent of the GDP in 2021­22 rising to 1.9 percent of the GDP by 2024-25. 73