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Public Adminstration QUESTION #9556
Question 1
The National Economic Council (NEC) and National Finance Commission (NFC) are both constitutional bodies. What is the fundamental difference in their scope and functions?
  • NEC decides how federal taxes are distributed between federation and provinces; NFC formulates long-term economic plans for national development
  • NEC reviews overall economic conditions and formulates financial, commercial and social policy frameworks; NFC decides criteria for distributing tax revenues between federal and provincial governments✔️
  • NEC supervises the Planning Commission and approves development projects above Rs. 40 million; NFC ensures audit compliance across all government tiers
  • NEC is a permanent body chaired by the Prime Minister; NFC is a temporary body constituted every five years — both perform identical functions of resource allocation
Correct Answer Explanation
NEC (Article 156) is the apex economic policy body — it formulates the macro-framework for financial, commercial, social and economic policy, chaired by the PM. NFC (Article 160) is a constituted body (every 5 years) with the specific technical function of determining how taxes in the 'divisible pool' are distributed between federation and the four provinces. They operate at different levels: policy framework vs. fiscal distribution formula.