Wednesday saw the presentation of the budgets for Sindh and Balochistan. The former presented a Rs3.562 trillion budget for FY2026-27 against estimated receipts of approximately Rs3.41 trillion, resulting in a projected deficit of about Rs242 billion with no new taxes. Like the federal budget, Sindh has also proposed a 7.0 per cent hike in salaries and pensions. An increase in the monthly minimum wage from Rs40,000 to Rs43,000 has also been proposed. And while the government has been compelled to trim its development programme after contributing towards national strategic requirements, there are significant relief-oriented measures in the budget. The budget has no new taxes and reduces the sales tax on education support services and increases the exemption threshold for agricultural super tax from Rs150 million to Rs500 million. The Sindh government has allocated Rs381.83 billion for healthcare services and Rs635.08 billion for education and related sectors. While the deficit and reduced development spending might be concerning, it appears that Sindh has prioritised immediate relief and assistance.
The Balochistan budget treads a similar path, with an outlay of Rs1.089 trillion, the majority of which goes to non-development spending. The provincial government has also set a revenue target of Rs170.09 billion from its own resources, a significant increase from Rs124.87 billion in the outgoing fiscal year. Education emerges as a top priority, with Rs157.28 billion earmarked for the sector and health has been allocated Rs73.99 billion. Given Balochistan’s formidable security challenges, Rs107.99 billion has been allocated for law and order. There do not appear to be any obvious or glaring causes of concern in either the Sindh or Balochistan budgets. The real worry is what is happening around them. The opposition in Sindh reportedly boycotted the budget speech and rejected what it claimed was a ‘repackaged’ and ‘anti-people’ budget. In Balochistan, opposition lawmakers claimed that the development allocation was insufficient for a province of its size and needs and that the federal government had reduced Balochistan’s budget, accusing both the centre and the provincial government of depriving the province of its rightful share of resources.
Can budgets or really any economic policy be successful without a broad consensus? The same party has been running Sindh for some time now but things do tend to change more often in Balochistan and it is unclear if any of Pakistan’s provinces can afford lurching from one policy to another. As is so often the case, the political wrangling surrounding economic policy can often be a bigger issue than the policy itself. And for all the criticism, there is a lack of clarity about what should be done differently. This is not to say that these budgets are perfect, but only that there is only so much room to manoeuvre given the local, regional and global situation the country finds itself in. Fiscal consolidation is non-negotiable, at least so long as the country is under the IMF programme, and there is only so much local officials can do about inflation/global energy prices. Given the levels of disaffection and polarisation in Pakistan currently, particularly in Balochistan, it is perhaps inevitable that even reasonable policies receive criticism. This only increases the need for provincial governments to deliver on their promises.
