Background of the Finance Commission The Finance Commission is established under the Thirteenth Amendment to the Constitution (1987). The establishment of a Finance Commission constitutes a key policy instrument for the regulation of the system of devolving power to provinces. It also constitutes a key policy instrument for regulating center-province relations in the area of provincial finance. The thirteenth Amendment created a provincial sphere of devolved governance by specifying an area of legislative, executive and financial competence to be exercised by Provincial Councils. The subject content of such competence was set out trough the demarcation of responsibilities of the Centre (the Reserved List) and the province (the Provincial List) as well as an area of overlapping responsibilities (the Concurrent List) The list of provincial subjects is extensive and covers (within limits specified mainly to exclude national or intra-provincial activities) subjects such as Public Order, Education and Educational Services, Local Government, Provincial Housing and Construction, Roads and Bridges and Ferries, Social Services and Rehabilitation, Agriculture and Agrarian Services, Rural Development, Heath, Indigenous Medicine, Food Supply and Distribution, Cooperatives, Land, Irrigation, Animal Husbandry, Entertainment and Sports, Betting and Gambling, etc. Thus the Constitution assigns the Finance Commission following responsibilities Consult with and recommend to the Government “such funds as are adequate for the purpose of meeting the needs of the provinces” from the Annual Budget Make recommendations to the President as to- The principles on which funds granted annually by the Government to the provinces should be apportioned between them. Any other matter regarding provincial finance referred by the President. Formulate principles for achieving balanced regional development in the country, taking into account the population and per capita income of the provinces and reducing the social and economic disparities and the differences in per capita income of the provinces Vision : Balanced and equitable socio-economic development in all provinces. Mission : To formulate policies and guidelines, provide planning and planning support, apportion resources, monitor and evaluate development endeavors, coordinate national and provincial agencies and make appropriate recommendations to the government for reduction of inter and intra disparities in a fair and equitable manner to achieve balanced regional development in provinces . Thrust Areas Ensure formulation and communication of principles on allocation and apportionment of financial resources for the provinces. Ensure fair distribution of resources among the provinces Reduce regional disparities and promote human development Ensure effective utilization of resources in the provinces Enhance generation of revenue at provincial and local levels Strengthen institutio