Rs3.45trn Sindh budget unveiled

KARACHI: With a deficit of Rs38.458 billion, Chief Minister Sindh Syed Murad Ali Shah unveiled Rs3.45 trillion provincial budget for the fiscal year 25-26 (FY26) in the Sindh Assembly on Friday, proposing a cut in the sales tax on service to 8 percent amid opposition’s protest.

Speaking at the budget session, the chief minister announced the government’s a “forward-looking development agenda” with scores of “transformative new initiatives” across the key sectors including education, health, agriculture, infrastructure, social protection, and local governance. “These initiatives reflect our commitment to equity, innovation, and inclusive growth.”

According to the budget documents, the Sindh government budget outlay has been increased by Rs394 billion or 13 percent to Rs3.450 trillion for FY26 compared to Rs3.056 trillion for previous fiscal year. Total receipts of the province are estimated to rise by 12 percent from Rs3.056 trillion in FY25 to Rs3.412 trillion for the next fiscal year.

On receipts side, current revenue receipt estimates increased by 10 percent to Rs2.824 trillion including, revenue assignment Rs1.927 trillion, straight transfer Rs116.433 billion, grants to offset losses Rs51.81 billion, provincial tax receipts (excluding GST on services) Rs288 billion and provincial sales tax on services and taxes from agricultural Rs388 billion.

In addition, the current capital receipts estimated Rs33 billion, carryover balance Rs100 billion, foreign grants Rs10.838 billion, foreign project assistance RS 366.744 billion and other grants Rs75.58 billion.

As per budget estimates, Current Revenue Expenditure (CRE) have been pitched at Rs2.150 trillion, being 12.4 percent higher than budget estimates of Rs1.912 trillion for the FY 2024-25. The increase is mainly due to inflationary impact on the operating expenses, enhancement of grants-in-aid to non-financial institutions including hospitals, public sector universities, local councils, necessary salary raise in shape of relief allowance to the government employees and raise in pension expenditure due to increase in pension. Current capital expenditures estimates; however, increased from Rs184 billion to Rs281.6 billion.

The chief minister said that projects under the public health and sustainable development goals are likely to see a budgetary share of Rs45 billion with 50 percent specifically for water sector schemes, supporting clean water access and climate resilience

A Rs25 billion of financial allocation is reserved for the home-based solar systems including a portion earmarked to scale decentralised, off-grid solar solutions for household in rural and underserved areas across the province.

CM Murad said that the government is set to launch a comprehensive, multi-year agriculture reform program— an ambitious initiative aimed at modernising farming, improving livelihoods, and enhancing food security. He added that the Benazir Hari Card will be the delivery platform for subsidies and services, as so far 200,000 farmers have been enlisted under this program.

In next financial year, he said, the number for erecting new homes will rise to around 1.5 million from 1.1 million in the current fiscal year. “We have opened bank accounts for more than 1.3 million beneficiaries for the rehabilitation of more than 12.3 million flood-affected populations”.

The irrigation sector will receive Rs42 billion funds, denoting the Sindh government’s commitment to the farmers’ community and improvement of irrigation system in the province, he said. The allocation also includes a Rs10 billion block that has been proposed for de-silting of N W Canal and Dadu Canal at the time of Sukkur Barrage closure next year, maintaining irrigation infrastructure and ensuring smooth flow of water into different waterways.

The budget estimates for livestock and fisheries sector has been proposed at Rs12.9 billion in a bid along with an amount of Rs120 million earmarked for helping the livestock farmers know about various breeds, modern methods of breeding, fodder cultivations and fishing and aquaculture.

In line with the relief measures, the government has proposed 10 percent on an ad-hoc basis allowance for the employees from BPS-1 to BPS-22 so as to equip them to bear the impact of inflation. For the pensioners we have proposed an increase of 7 percent for the next fiscal year.

The cumulative impact of these relief measures will be around Rs52 billion per annum, chief minister said. He said that there is a proposal under the government’s inclusive policies to scale up the monthly rate of Special Conveyance Allowance from Rs4,000 to Rs6,000 to the differently-abled employees. This measure will have additional financial impact of Rs114.48 million, he added.

However, he said that the government’s decision about the minimum wage for the labour classis is under consideration keeping view the soaring inflation and rising cost of living.