KARACHI: Sindh Chief Minister Syed Murad Ali Shah presented a Rs3.562 trillion budget for the fiscal year 2026-27 against estimated receipts of approximately Rs3.41 trillion, resulting in a projected deficit of about Rs242 billion with no new taxes.
He also announced a seven per cent increase in salaries and pensions, a Rs400 billion development programme, a Rs13.2 billion social protection package, and a series of long-term initiatives aimed at transforming Sindh into a regional hub for trade, finance, technology and renewable energy.
Presenting the budget in the Sindh Assembly, Shah said the province had prepared its financial plan amid a challenging global and domestic environment marked by geopolitical tensions, inflationary pressures, climate-related risks and economic uncertainty.
He said that while Pakistan’s economy had shown signs of recovery during the outgoing fiscal year, ordinary citizens continued to face hardships due to rising living costs, energy prices and inflation.
The chief minister said Sindh’s budget strategy for the coming year was guided by four principles: safeguarding the province’s constitutional rights, maintaining fiscal sustainability, contributing to national stability and continuing investment in public welfare.
The budget envisages total expenditures of around Rs3.562 trillion against estimated receipts of approximately Rs3.525 trillion, resulting in a projected deficit of about Rs36.9 billion.
The Sindh government has allocated Rs381.83 billion for healthcare services, including Rs336.46 billion for current expenditure and Rs45.38 billion for development spending, as it continues to expand hospitals, primary healthcare facilities, emergency services, disease prevention programmes and modern medical infrastructure to improve access to quality health care across the province.
The Sindh government also has earmarked Rs635.08 billion for education and related sectors in 2026-27, and spent over Rs346 billion on recurring and development activities, while recruiting nearly 75,000 teachers and expanding digital monitoring, early childhood education and public-private partnerships to improve learning outcomes across the province.
Sindh’s budgetary size has continued to expand, with the provincial government proposing a total outlay of Rs3.652 trillion for FY 2026–27, compared to Rs 3.442 trillion in FY 2025–26, reflecting an increase of Rs210 billion and underscoring the government’s emphasis on development spending, social services and infrastructure investment.
Shah disclosed that the provincial government had been compelled to reduce its development portfolio from a projected Rs 575bn to Rs400bn after contributing towards national strategic requirements under a negotiated arrangement with the federal government.
“Even in a difficult fiscal environment, we have protected priority development projects and essential public services that directly affect the lives of our people,” he said.
The CM announced that there would be no new taxes in the coming fiscal year and instead unveiled a series of relief measures aimed at supporting education, agriculture, insurance and employment sectors.
Among the measures announced were a reduction in sales tax on education support services to five per cent, continuation of concessional tax rates for overseas employment recruiting agencies and beauty salons integrated with point-of-sale systems, and reductions in taxation applicable to insurance agents and brokers.
The budget also provides relief to the agriculture sector by increasing the exemption threshold for agricultural super tax from Rs150 million to Rs500 million and reducing the applicable rate from 10 per cent to 8 per cent.
In a move expected to benefit public sector employees and pensioners, Shah announced a seven per cent increase in salaries and pensions of the government employees with effect from July 1. In salaries, a seven per cent increase has also been granted by amalgamating the Adhoc Relief Allowances (ARA) of 2022 and 2025. The minimum wage has also been increased from Rs40,000 to Rs43,000 per month.
The CM said the government remained committed to shielding vulnerable groups from economic hardship and announced a Rs13.2bn social protection package comprising the Kitchen Garden Initiative, Benazir Hari Card Programme, Benazir Women Agriculture Workers Programme and support schemes for widows and orphans.
On the development side, the Annual Development Programme for FY26-27 allocates Rs25.9bn for education, Rs17.4bn for health, Rs121.6bn for local government and municipal infrastructure, Rs40.9bn for public health engineering, Rs30.9bn for irrigation, Rs39.5bn for transport and communications and Rs6.3bn for agriculture and livestock.
Shah said the province had achieved the highest development spending in its history during the outgoing fiscal year, releasing more than Rs900bn for development activities despite inflationary pressures and rising construction costs.
Highlighting reconstruction efforts following the devastating floods of 2022, he said one million houses had already been completed under the Sindh Peoples Housing for Flood Affectees Programme, while financing arrangements had been secured for approximately 1.7 million housing units with international support amounting to $1.675 billion.
The CM said the programme had also empowered women through the transfer of land ownership rights to hundreds of thousands of beneficiaries.
A major feature of the budget speech was the announcement of a new generation of large-scale PPP projects intended to position Sindh as a regional hub for trade, finance, technology, renewable energy and sustainable development.
The CM said Sindh’s PPP programme had earned international recognition, including appreciation from the United Nations Economic Commission for Europe (UNECE), The Asset magazine and The Economist, and had emerged as one of the most successful sub-national PPP frameworks in Asia.
Building on that success, the government plans to launch several transformational initiatives through PPP arrangements.
Among the flagship initiatives is the proposed development of Keti Bandar as a maritime, logistics, industrial and energy hub. He added that Shaheed Zulfikar Ali Bhutto had launched Port Qasim while Chairman Bilawal Bhutto had directed him to initiate the Keti Bandar project.
The government will undertake an internationally benchmarked viability assessment to evaluate the establishment of a modern coastal economic corridor incorporating port infrastructure, industrial zones, logistics and warehousing facilities, export-oriented manufacturing clusters, energy projects and multimodal transport connectivity.
The project will also explore linkages with the Dhabeji Special Economic Zone, Thar’s energy resources and emerging regional trade routes.
Shah described Keti Bandar as a “once-in-a-generation opportunity” capable of reshaping the economic geography of Sindh in much the same way Port Qasim transformed Pakistan’s industrial landscape.
In another major announcement, the CM unveiled plans for establishing the Sindh International Financial Centre (SIFC) in Karachi.
The proposed centre is envisioned as a world-class platform for investment, infrastructure finance, Islamic finance, climate finance, fintech and international commercial services.
The government plans to develop legal, regulatory and institutional frameworks, including modern commercial courts, arbitration centres and investor-friendly regulations aimed at attracting international capital and improving investor confidence.
Three potential sites in Karachi’s commercial corridor have already been identified, and funds have been earmarked for an internationally bankable feasibility study.
Recognising the growing global demand for artificial intelligence, cloud computing and digital infrastructure, the government announced the Sindh Green Data Infrastructure Initiative.
The project seeks to establish renewable energy-powered technology zones and large-scale data centre parks supported by solar and wind energy resources available across the province.
The initiative aims to attract global technology firms, cloud service providers, artificial intelligence enterprises and digital infrastructure investors by offering environmentally sustainable and cost-effective operating conditions.
Officials believe the programme could create a new technology ecosystem while generating surplus clean energy for industrial estates, desalination plants and special economic zones.
The chief minister also announced one of Pakistan’s largest household renewable energy programmes under which 275,000 free solar home systems, procured at a cost of Rs18bn, will be distributed among low-income households.
Additionally, a subsidised solar financing programme will be launched through the Sindh Enterprise Development Fund and Sindh Bank to enable middle-income families to install rooftop solar systems.
To modernise agriculture, the government plans to introduce legislation establishing farmer-led agricultural collectives aimed at helping small farmers pool resources without surrendering ownership of their land.
The collectives will be recognised as bankable entities and given access to subsidised financing, insurance, machinery, storage facilities, modern irrigation systems and market linkages.
The initiative seeks to improve productivity, water efficiency and climate resilience while raising rural incomes.
The government also announced plans to launch an Integrated Waste-to-Value and Circular Economy Programme under the PPP framework.
The initiative will focus on converting municipal waste into economic resources through recycling, refuse-derived fuel production, methane capture and carbon credit generation.
Officials expect the programme to improve urban environmental management while creating new revenue streams and green employment opportunities.
Despite fiscal constraints, the government allocated Rs400bn for development spending, prioritising social sectors and infrastructure.
Major allocations include Rs121.6bn for local government projects, Rs40.9bn for public health engineering, Rs39.5bn for transport and communications, Rs30.9bn for irrigation, Rs25.9bn for education and Rs17.4bn for health.
