Sindh sets record with Rs1trn development budget for FY26

KARACHI: Despite mounting fiscal pressures, the Sindh government has allocated a record-breaking development budget of over one trillion rupees for the next fiscal year (FY26)-the highest ever in the province history.

The Chief Minister Sindh, Syed Murad Ali Shah, on Friday, in his budget speech for FY26 said that the Annual Development Programme (ADP) for FY26 reflects a strategic balance between fiscal prudence and targeted development. “With a focus on social sectors, resilience, and equity, the Government of Sindh is committed to ensuring development that is inclusive, climate smart, and aligned with long-term goals,” he added.

As per announcement, budget allocation for the provincial development expenditure has been increased by 6 percent from Rs 959.1 billion (FY25) to Rs 1.018 trillion for the next fiscal year. The development outlay for the next fiscal year is also 24 percent higher than actual spending and revised budget estimates of this fiscal year, which was Rs 817.2 billion.

The total development expenditure outlay includes Rs 520 billion of Provincial ADP and Rs. 55 billion for district ADP, Rs. 366.7 billion for Foreign Project Assistance and Rs 75.58 billion for federal PSDP schemes.

Chief Minister in his budget speech said that despite fiscal pressures, the ADP for FY26 has increased modestly to Rs 1.018 trillion, reflecting the Government’s commitment to sustaining development momentum while focusing on efficiency, equity, and economic recovery.

The proposed allocations signal a move towards a climate-smart, inclusive, and regionally balanced development agenda, in line with Sindh’s longer-term vision. Out of 1,777 ongoing (LTBC) schemes funded in FY25, 1,494 or 84 percent will be completed within the current fiscal year.

Special Initiatives in FY26 have been proposed includes new development initiatives Rs 15 billion, Rehabilitation of Flood-Damaged Infrastructure Rs 12 billion, Renewable Energy Projects Rs 25 billion, Karachi Urban Infrastructure Development Rs 12 billion, CSR-2024 Cost Impact Rs 15 billion, SDG-Aligned Development Rs 45 billion, Divisional HQ City Uplift Rs 7.5 billion.

Shah said that Sindh started off with an ADP size reached Rs. 595 billion based on departmental demands, however, due to anticipated shortfall in federal transfers, Sindh Government rationalized the ADP down to Rs. 520 billion, marking a 20 percent reduction. Therefore, only 475 new schemes have been proposed in ADP FY26, linked to high-priority areas, including Flood rehabilitation, Renewable energy, Development in 5 less-developed districts, Uplift of divisional headquarters, Clean water and sanitation.

A focused increase of 20 percent has been proposed for social and productive sectors, while allocations for other departments have remained constant. The budget allocations for major sectors for next financial year are Rs. 96.7 billion for Education sector, Rs. 45.4 billion for Health sector, Rs. 80.6 billion for Irrigation sector, Rs. 132.79 billion, for Agriculture, Rs. 155.2 billion for Energy sector, Rs. 11.25 billion for Livestock and Rs. 23.1 billion for Fisheries sectors.

Under the development strategy, the Government of Sindh has decided to introduce a wide array of new initiatives across sectors that touch the lives of millions, from youth empowerment and healthcare access to climate-resilient infrastructure, sustainable energy, and community development.

Chief Minister said that the Government of Sindh has formulated ADP 2025-26, building upon the development landscape of the last FY25, whereby responding to both emerging challenges and strategic development priorities. The FY25 ADP was marked by fiscal consolidation, with a strong emphasis on post-flood reconstruction, completion of ongoing schemes, and protecting core development functions amidst cost escalations and constrained federal transfers.

No new schemes were introduced in that fiscal year (FY25), reflecting the government’s commitment to fiscal discipline and timely project completion.

Under the Flood Recovery to Resilience, the government has initiative from infrastructure rehabilitation in FY25 to resilience-building investments in FY26, including renewable energy and water conservation systems.

While 1,494 schemes are expected to be completed in FY25, some 475 schemes have been introduces in for FY26, carefully selected new schemes, supported by higher counterpart funding and policy alignment.

Government of Sindh is pursuing a planned development process such that developmental activities continue even during the economic slowdown. It is because of this planning that the current fiscal year has witnessed the highest development expenditure ever.

Chief Minister Sindh informed that last year Sindh raised its concerns regarding the Federal Government’s unwillingness in disbursing the committed amount of Rs. 52.912 billion in Federal PSDP against 19 schemes in year 2024.

However, due to strong intervention by the PPP Chairman Bilawal Bhutto Zardari Sindh Government have so far Rs. 41 billion against the committed amount this year. The revised estimates for FY25 for provincial development expenditure stand at Rs. 846.9 billion. It includes Rs. 392.7 billion for Provincial ADP, Rs. 55 billion for district ADP and Rs. 296.2 billion for Foreign Projects Assistance (FPA).

For development expenditure Sindh government released Rs. 666 billion, out of which it is expected that approximately Rs. 590 billion will be utilized by the end of CFY. This year will mark the highest development expenditure ever in the fiscal history of the province and we will be able to complete more than 1400 development schemes, which again is the highest number ever.